Sunday, September 9, 2012

Dick Bove Thinks BofA Will Cut 30,000 Jobs, Close 600 Branches in Big Restructuring (Reuters Video)

Source: Reuters
Dick Bove, banking analyst at Rochdale Securities, told Reuters TV that he thinks Bank of America will cut 30,000 jobs over the next two years and shut down 600 branches to restructure its consumer finance business. He was on Reuters TV on September 7, 2012 sharing his views on this, see the video below. It looks like Countrywide Financial is still haunting Bank of America. Dick Bove said,

"basically you're gonna lose $10s of billions related to Countrywide, and there's just nothing you can do to stop it. You're going to lose maybe $10 billion in the State Attorney General lawsuit. You're going to lose, who knows, maybe $30 billion in this new lawsuit from the FHFA. You're going to lose $10s of billions as a result of private lawsuits. You're going to lose another set of $10s of billions related to simply the mortgages not paying back, or the home equity loans not paying, and there's just nothing you can do about it. All you can do is sit there and absorb these losses, which is one of the primary reasons that you have to restructure the company so dramatically; why you have to fire the 30,000 people, close the 600 branches, and shift the emphasis of your business away from loans toward capital market activity."

In January of 2011 on CNBC, Dick Bove said we were in a new golden age of banking, which is interesting. We definitely are, once everything is allowed to fail. Why don't these too-big-to-fail banks figure out a way to provide a backbone for peer-to-peer secured lending? Like Prosper.com, but with actual collateral backing loans. Bove thinks Bank of America will dramatically move out of mortgages and into credit cards, and thinks Merrill Lynch will play a more important role at BofA going forward (capital markets).


And then read about UBS layoffs at DealBreaker.

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