Bank of America planning investment banking cuts

(Reuters) - Bank of America Corp is planning to cut about 300 jobs in its investment banking and capital markets group, as it struggles to rein in costs to make up for weak revenue growth, sources familiar with the situation said on Tuesday.

The layoffs are not nearly as eye-popping as the bank's job cuts in areas like retail banking. Wall Street companies have broadly been looking at cutting jobs recently.

The bank, the second-largest in the United States by assets, is also assigning junior bankers to work with broader groups of companies, the sources said. That move could also lead to more layoffs, the sources said.

The changes for junior bankers are part of the cost-cutting program known as "Project New BAC," which the bank launched last year, the sources said. The program, named for the bank's ticker symbol, is meant to improve profits as a sluggish economy weighs on revenue growth, and new regulations boost compliance costs. The bank is also trying to streamline a company that has grown increasingly bloated after decades of acquisitions.

The first phase of the program is expected to cut about 30,000 jobs and $5 billion in annual expenses in consumer and technology areas over the next several years. Plans for the second phase, which covers investment banking, sales and trading, commercial banking and wealth management, are expected to be finalized in May.

Bank of America declined to comment on its plans for the second phase. In earnings conference calls, executives have said the second phase will produce fewer job cuts and less savings than the first phase because it covers a smaller and more efficient area of the company.

Trimming expenses in the bank's institutional businesses is a delicate task because these operations, bulked up by the 2009 Merrill Lynch acquisition, have produced much of the bank's profit in recent years.

Still, Bank of America and other Wall Street firms have been scaling back after market volumes slowed last year amid concerns about the European debt crisis. In the first quarter, Bank of America's trading revenue and investment banking fees rebounded from a weak fourth quarter but were still down from a year ago.

"Clearly on the margin this quarter you feel better about the overall sales and trading opportunity, (but) it's not going to change the rigor and discipline with which we go through" the second phase of New BAC, Chief Financial Officer Bruce Thompson said during the bank's first-quarter earnings call.

Bankers in equities, mergers and acquisitions, and sales and trading, where business has slowed, are bracing for job cuts in coming weeks, sources familiar with the matter said. Higher-ranking managing directors whose salaries have increased in compensation for reduced bonuses could be targeted in the reductions, sources said.

The bank could also trim its workforce further by selling its wealth management units in Asia, Latin America and Europe. Reuters reported on April 17 that Bank of America was looking to sell the operation for as much as $3 billion. The business has fewer than 2,000 employees, according to a source familiar with the situation.

At the end of March, Bank of America had about 278,700 employees worldwide.

Amid the cost-cutting efforts, Bank of America's investment banking and capital markets group, which is led by co-chief operating officer Tom Montag, has experienced significant upheaval in its upper ranks.

Key executives such as European dealmaker Andrea Orcel and corporate and investment banking chairman Michael Rubinoff have departed for other jobs in recent months, leaving few Merrill veterans in top positions. Last week, the bank hired Alex Wilmot-Sitwell from UBS as president of Europe and emerging markets, excluding Asia.

In the first four months of this year, Bank of America Merrill Lynch has dropped in the league tables in some key businesses as total volume shrinks, according to Thomson Reuters data. The bank fell to No. 8 in worldwide announced mergers and acquisitions from No. 3 in the same period a year ago, while it slipped to No. 7 from No. 2 in global equity capital markets deals.

In global debt capital markets, it held at No. 5 in the rankings, according to Thomson Reuters, while it climbed one spot to No. 1 in global syndicated loans from a year ago.

World Cup venues will be ready, Brazil tells Fifa

Fifa, football's world governing body, has no reason to worry about preparations for the 2014 World Cup, Brazilian Sports Minister Aldo Rebelo has told the BBC.

Mr Rebelo was speaking ahead of a meeting at Fifa headquarters in Zurich.
Fifa officials are concerned that some venues in Brazil will not be ready in time for the Confederations Cup in 2013.
That event is seen as a key rehearsal for hosting the World Cup.
Brazil has spent billions refurbishing old stadiums and building new venues for the biggest sporting event in the country's history.
It is also investing in airports and roads.
But analysts say the work is running behind schedule.
Brazil's biggest and best-known stadium, Maracana, may not be finished in time to host the closing match of the Confederations Cup on 30 June 2013.

Sports Minister Aldo Rebelo insists there are no delays in the building schedule

The two-week tournament gathers eight of the top teams in world football. Brazil, who qualify as hosts, will face the champions of Fifa's regional confederations, including Spain, Uruguay, Mexico and Japan.

                           Now in defence: Ronaldo is in the Brazilian organising committee

Fifa regulations say all venues must be ready by February 2013, four months before the tournament takes place.
Ahead of the meeting in Zurich with Fifa president Sepp Blatter and other officials, Mr Rebelo told BBC Brasil: "There is no delay and the building schedule is going ahead according to plan."
Former world champions Ronaldo and Bebeto, now in the Brazilian organising committee of the World Cup, were also due to be at the talks.

Controversial remarks

Work at the Maracana stadium was delayed last year by a strike. Builders complained they were being poorly paid and stopped work for weeks.
Now, a major corruption scandal involving some of Brazil's top politicians, may also get in the way.
A building company contracted to do one third of the work, Delta, is facing a congressional investigation after being caught up in the bribery allegations.
As a result, Delta is no longer involved in the Maracana project.

Now in defence: Ronaldo is in the Brazilian organising committee

Mr Rebelo said Fifa's concern is natural, "but we will show them all venues will be ready in time".
Relations between the Brazilian government and Fifa were strained earlier this year after controversial comments made by Fifa's secretary-general, Jerome Valcke.
Mr Valcke said that that Brazil needed a "kick up the backside" and appeared more concerned with winning the World Cup than organising it.
He later apologised in a letter to Mr Rebelo.
Mr Rebelo told the BBC that relations had "neither improved nor deteriorated" since he took office as sports minister last October.
The Brazilian government has always said it is determined to deliver a successful World Cup as well as a lasting legacy.
The 2014 World Cup will be the first in South America since Argentina hosted the tournament in 1978 and the first in Brazil since 1950.

 

Putin and Medvedev complete job swap in Russia

Reuters) - Russia's lower house of parliament confirmed former president Dmitry Medvedev as prime minister on Tuesday, completing a job swap with Vladimir Putin that has sparked protests against the two leaders' grip on power.

The approval vote, comfortably won by Medvedev as Putin looked on, ignored growing concern in the country that keeping power in the hands of the same men who have led Russia for the past four years will bring political and economic stagnation.
Police led away more than 20 people, including two opposition leaders, when they broke up a peaceful protest near the Kremlin hours before the vote, after detaining more than 700 on the previous two days to keep a lid on dissent.

The vote in the State Duma, the lower house, was held under tight security, with camouflage-clad riot police guarding the building near Red Square and police trucks and buses parked nearby.
Medvedev stood and nodded his gratitude to Duma deputies and then shook hands with Putin. The president smiled and applauded the outcome of the vote, one day after he was sworn in as president for a six-year term.
"I thank you for showing your trust in me," Medvedev told the assembly. "I am absolutely sure that if we work together we can achieve results."

Medvedev, 46, had told the chamber before the vote that Russia must reduce red tape, crack down on corruption and protect property rights to improve the business environment and become more competitive against the top world economies.
"
The attitude to business in this country must change drastically," he said before the approval vote.
Medvedev pledged wholesale changes in the line-up of the government, without naming any of his cabinet, but said the new team would be one of continuity, pursuing a similar direction to its predecessor under Putin.
He also promised to be open to dialogue with his political opponents, although it was not clear whether he had in mind the non-parliamentary opposition, which has organized the biggest protests since Putin first rose to power in 2000.

Putin's opponents question the legitimacy of his victory in the March presidential election and say his choice of Medvedev as premier is a slap in the face for democracy.
"Everything as always has been decided without consulting the people ... People don't like this," said Ilya Ponomaryov, one of the organizers of protests that were triggered by allegations of electoral fraud last December.

Nikolai Levichev, a senior member of the Just Russia party, criticized the lack of political reform during Medvedev's presidency and said many of the promises he had made - such as on battling corruption and strengthening the independence of the judiciary - had not been fulfilled.

WEAKER PREMIER THAN PUTIN
Putin, 59, gave a brief speech to the Duma presenting Medvedev as an experienced politician who had served Russia well as president and would not let the country down now.
They have been friends since working together in the St Petersburg city authorities in the 1990s, and Putin steered the younger man into the Kremlin in 2008 because he was barred from a third successive presidential term himself.
But Medvedev will be a less influential prime minister than Putin, who has remained Russia's dominant leader for the last four years even though the presidency has much more power, including command of the armed forces.

Putin displayed his dominance of the political system by taking the floor after the proceedings to give his own answers to questions deputies had put to Medvedev.
None of the deputies asked about the protests in their questions to Medvedev, focusing instead on issues such as the pension age and state support for science.

Putin and Medvedev face a huge challenge in modernizing the country and reforming the $1.9 trillion economy to reduce its heavy dependence on energy exports, which makes it vulnerable to any reduction in the global price of oil.
Putin set out their intentions on Monday by ordering the government to boost investment and shake up state-run industries to usher in a "new economy".
He also set long-term goals that included raising capital investment to no less than 25 percent of GDP in 2015, from the current level of 20 percent, and creating 25 million high-productivity jobs by 2020.
An array of decrees also set goals of making life easier for ordinary Russians, including raising wages for state workers, making mortgages cheaper, expanding kindergartens and improving health care.
He and Medvedev face a battle to quell rivalries between liberals and conservatives, and Putin's choice over who joins the cabinet will go some way to showing how determined and able he is to push through reforms and privatization.

Google gets Nevada driving licence for self-drive car

Driverless cars will soon be a reality on the roads of Nevada after the state approved America's first self-driven vehicle licence.

The first to hit the highway will be a Toyota Prius modified by search firm Google, which is leading the way in driverless car technology.
Its first drive included a spin down Las Vegas's famous strip.
Other car companies are also seeking self-driven car licences in Nevada.

Accident

The car uses video cameras mounted on the roof, radar sensors and a laser range finder to "see" other traffic.
Engineers at Google have previously tested the car on the streets of California, including crossing San Francisco's Golden Gate bridge.
For those tests, the car remained manned at all times by a trained driver ready to take control if the software failed.
According to software engineer Sebastian Thrun, the car has covered 140,000 miles with no accidents, other than a bump at traffic lights from a car behind.

Human error

Bruce Breslow, director of Nevada's Department of Motor Vehicles, says he believes driverless vehicles are the "cars of the future".
Nevada changed its laws to allow self-driven cars in March. The long-term plan is to license members of the public to drive such cars.
Google's car has been issued with a red licence plate to make it recognisable. The plate features an infinity sign next to the number 001.
Other states, including California, are planning similar changes.
"The vast majority of vehicle accidents are due to human error," said California state Senator Alex Padilla, when he introduced the legislation.
"Through the use of computers, sensors and other systems, an autonomous vehicle is capable of analysing the driving environment more quickly and operating the vehicle more safely."