The U.S. financial giant Bank of America intends to cut its staff by 3,500 people by the end of the third quarter of this year, reported Bloomberg, citing the president and CEO Brian Moynihan financial institution. The dismissals are not part of the cost-cutting Project New BAC. Some of the employees have been told that it would be redundant. This is the second contraction of bank employees this year, during the first 6 months of the year were laid off 2500 people. The board of directors and investors demand cost reductions by Moynihan, as the market capitalization of the credit institution has halved this year, while profits fell due to slower growth in U.S. economy.
“We need to reorganize the business in line with reality. If you reduce the profit and revenue indicators will need to reduce costs and premiums, “said John Waddell of Mirae Asset Securities Ltd. in Hong Kong.
The net loss of Bank of America for the first half of the year was 7.39 billion dollars, while in the analogous perod of 2010 had a profit of 5.62 billion dollars. According to analysts, the 50 largest banks worldwide have announced only during the first week of August, staff cuts of 60 000 seats, which is the highest indicator since 2008.
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The U.S. consumer confidence has fallen to 59.9 in August, according to the index of the University of Michigan, which is its lowest level since 1980. The decline surprised analysts, who expected it to be smaller – to 62,5. In July the same index fell to 63.7 from 71.5 in June. This indicator is more sensitive to events in financial markets other than sentiment, measured by the private Institute Conference Board. It is considered the most important barometer of economic conditions, providing mood and purchasing propensity of U.S. consumers. Consumer spending is equal to two-thirds of U.S. economic activity.
The main problems that afflict Americans, are related to employment and appreciation of food and fuel, say analysts.

The company marketing raw materials Glencore International PLC receives an assessment of 70 billion USD from analysts whose ratings have fallen in the Dow Jones Newswires. They say the company will probably be able to double its profits over the next two years. The estimates are three of the banks participating in the organization of initial public offering of Glencore – Bank of America Merrill Lynch, Barclays Capital and Liberum Capital. The average estimate of market capitalization, which should have a company within the ranges from 55.2 to 69.5 billion dollars. In these calculations do not fall in revenue between 6.8 and 8.8 billion dollars that Glencore is hoping to attract than double its listing in London and Hong Kong. The intentions of Glencore were trading to be placed between 15 and 20 per cent of the shares of the company against which it can take between 9 and 11 billion dollars. Around 2.2 billion of them are making existing shares to be placed secondary. The most optimistic estimates of Barclays Capital and Bank of America gives a value of Glencore from 69,9 billion dollars, and most pessimistic – respectively 52.5 and 52.4 billion dollars. In Liberum maximum of 68.8 billion, minimum – 60.7 billion USD. The evaluation of the company is quite difficult because it must assess the three main areas of its work.
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The U.S. regulators announced the collapse of three banks in the country. The total assets of the three financial institutions amounted to 970 million dollars, according to initial estimates the three failure will cost the federal deposit insurance corporation (FDIC) approximately 200 million USD. The largest of the three banks is located in Burlington, Wisconsin, First Banking Center. The financial institution has total assets worth 750.7 million dollars at the end of September and is operating in 17 offices. The total deposit portfolio of the bank was about 664.8 million dollars. The second closed this week is located in the Florida Gulf State Community Bank. She was in possession of assets worth 112.1 million and deposits of 112.2 million dollars. This bank is 28 th of Florida financial institution, closed since the beginning of the year. Last bankruptcy of Allegiance Bank of Pennsylvania, which has total assets of 106.6 million dollars and had a total of five offices. The US banking system is still in bad position after the financial and economy crisis, which hurt many of the financial institutions.
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The investors in the bond market becoming more distrustful of the reliability of the largest financial companies in the world, although major rating agencies have not moved to decrease their credit rating at this stage. Required by investors in bonds yield banking giants such as France’s BNP Paribas and Goldman Sachs U.S. is 242 basis points higher than that of government securities of the United States. This index shows Global Broad Market Financial to Bank of America Merrill Lynch, which brings together bonds of companies with an average credit rating of A1 on the scale Moody’s. This difference is much higher than presumed credit rating of banks. It is actually much closer to the difference of 259 basis points between the interest on government securities and bonds in this industrial companies that have a credit rating by five steps lower than that of banks. Only three weeks until the difference (spread) between the profitability of banks and government bonds was up 11 basis points. Even in early 2009 spread was less than now amounting to 177 basis points. All this reflects the distrust of investors to the bonds of large banks that are actually most at risk from potential bankruptcy in Greece or another indebted country. Government debt crisis reduced confidence in Europe in the creditworthiness of the banks whose profits may suffer more than planned and additional regulations in the financial sector.
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The management of two of the largest financial groups in the U.S. – Citigroup and Bank of America, has received an average salary of 18 million dollars per person in 2008 This happens within the same year, when both are threatened by bankruptcy banks received 90 billion dollars financial assistance from the state. For example, Citigroup has paid 390.2 million dollars for 21 people from top management, and Bank of America for an amount estimated at 227.8 million dollars, divided between 13 executives. The amount per person in the first case amounts to 18.6 million dollars, while the second – for 17,5 million dollars, police Bloomberg. The average salary for managers of both banks is double that of the other five rescued by the state financial institutions. Faynbarg Kenneth, who was charged with the task of government to ensure that bonuses and pension packages at high-paid 100 managers of troubled companies instruct their salaries for 2009 to be shortened by an average of 50%.
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The main stock indexes in the United States fell in early on the last trading session this week, after the financial results of General Electric and Bank of America disappoint investors, and the index of consumer confidence in the University of Michigan unexpectedly decreased. As a result, Dow Jones IA away from the one-year peak, which subdued during yesterday’s session. Two hours after the start of trading the index of the 30 largest companies on the New York Stock Exchange decreased by nearly 1 percent to 9962.9 points. The wider S & P 500 retreated further to 1.1 percent to 1084.2 points while the index of companies by the exchange Nasdaq – Nasdaq Composite, lost 1.3 percent to 2145.5 points. Financial and technology companies are ranked among the top companies in the losers of the session. The loss of the largest in size of its assets to U.S. Bank Bank of America for the third quarter was greater than expected. Investors ignored the good financial results on Google and IBM, and the rise of industrial production by 0.7 percent in September.
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The indexes of the Old Continent ended with reductions this week for the last session on Thursday after pan-European index Dow Jones Stoxx 600 rose to its highest level in 12 months. Reason for this became worse-than-expected quarterly results at Sony Ericsson, General Electric and Bank of America. Financial companies in the composition of the Dow Jones Stoxx 600 contributed most to today’s drop the index. Dow Jones Stoxx 600, which monitors the securities markets in 18 western states, slid 0.7 percent to 245.58 points. Thus limit its stock measure ahead of the start of the week to 1.2 percent. With the sharp drop today distinguish the Exchange in Athens. The main Greek ASE index decreased by 2.2 percent to 2830 points after news that the Treasury may impose a single tax profits of banks and other companies. Thus the government hopes to reduce the large budget deficit of the country. Shares of National Bank of Greece, which is the largest credit institution in Greece, fell by 3.6 percent to 26.80 euros per share after the news. In Britain’s FTSE 100 was down by 0.6 percent to 5190 points, but the record weekly rise of 0.6 percent. Top losers were financial and extractive companies because of disappointing results at Bank of America and cheaper metals.
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The largest U.S. bank Bank of America reported second loss within one year. For the period July September financial institution has a negative financial result of 1 billion dollars or 26 cents a share. The last loss was reported for the fourth quarter of 2008. The result of the previous quarter, in contrast to profit of 1.18 billion dollars for the same period of 2008, analysts expect losses to be at the rate of 12 cents per share. The quarterly report will be the last that will be the responsibility of the current CEO Kenneth Lewis, who left the institution at the end of the year because of criticism that suffered after the acquisition of Meriil Lynch. Exactly acquired at the beginning of this year, investment bank has contributed to smaller losses in this quarter because of good results from trading in shares, debt securities and currencies.
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The Executive Director of Bank of America Kenneth Lewis announced his retirement from office on 31 December. The Bank, one of the most affected by the financial crisis after a controversial effects buy Merrill Lynch, supported by the Federal Reserve has not yet found a successor to Lewis. Earlier this year, was forced to retire from post at board chairmen of directors of the bank has notified its decision to other leaders. The Executive Director of Bank of America believes that it is strong enough to cope with the challenges ahead in the market. The loss of positions for Lewis came after he realized that he had approved the purchase of the assets of Merrill Lynch without informing investors about the bank’s huge losses.
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