Bank of America Makes Big Cuts
Bank of America, which has faced mounting lawsuits in recent months and criticism over its foreclosure practices, announced Monday that it will cut 30,000 jobs and trim $5 billion in annual costs by the end of 2014.
Bank of America says its cost reductions will come from changes it plans to make in its home lending, consumer and small banking business, and credit card operations.
Chief Executive Brian Moynihan said at an investor conference Monday that the weak economy and the bank’s troubled mortgage unit continues to pose a challenge to the bank. Moynihan said the bank also remains challenged by low lending and interest rates hovering near record lows.
However, in a statement, the bank said “it intends to become a more focused, leaner, and more efficient company, providing all of its customers and clients with the best financial services, generating strong revenues, carefully managing expenses and risks, and delivering long-term value for shareholders.”
Bank of America’s purchase in 2008 of Countrywide Financial, once the nation’s largest subprime lender, has caused a wave of lawsuits that have resulted in costly litigation and settlements for the bank. Earlier this year, Bank of America announced an $8.5 billion settlement with investment firms over mortgage-backed assets. Bank of America also faces a lawsuit by state and federal regulators for questionable foreclosure processes.
Source: “Bank of America Cutting 30,000 Jobs,” CNNMoney (Sept. 12, 2011)