Approximately 2,000 positions in Bank of America’s (NYSE:BAC) investment banking, commercial banking and non-U.S. wealth-management divisions, will be eliminated, according to sources involved with the company’s cost cutting conference call. It appears that even the bank’s ‘moneymakers’ are not safe from the axe, during this period of relentless cuts.
A combined plan of Fannie Mae (FNMA.OB) and Citigroup (NYSE:C) was nixed in the making, although it might have saved Fannie up to $410 million, and assisted struggling homeowners as well. Congress is looking into why the so-called shared appreciation program, which would have allowed write-downs of principal in return for the lender receiving shares of future appreciation, was not approved. The program could have been set up at a very low cost and would have benefitted Fannie Mae immediately.
Lloyds (NYSE:LYG) posted a first quarter statutory pretax profit of £288 million, which is down quarter-to-quarter from £316M, and also a loss of £3.5 billion year-to-year. Total impairments dropped by 36 percent, and the company will place another £375 million in reserves to allow compensation for people who were ‘mis-sold’ insurance. Further, Lloyds reached its goal (two years early) of reducing its loan-to-deposit ratio to 130 percent, and intends to cut 120 percent inside a year. Reliance upon wholesale funding is reduced 24 percent year-to-year, and funding with maturity of less than a year is down 41 percent. Core Tier 1 capital ratio is now 11 percent, compared to 10 percent a year ago.
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