Institutional Investor reports that Bank of America may well thwart the ambitions of many mid-tier European banks hoping to make a killing in the bond markets when conditions recover.
The bank has been quietly expanding its presence in Europe over the last year or so and has a huge balance sheet at its disposal. Corporates with cashflow problems may well find the prospect of cheap credit from Bank of America attractive.
The bank has struggled with its identity in the recent past and often been accused of having an identity crisis. It has been unable to convince the market about what it realy stands for. It has a strong retail presence in the US, some wealth and broking activities and a fairly low-key investment banking presence. But that might all be about to change.
As other banks have been downsizing their equities divisions in the last 18 months, Bank of America has been on a spending spree, picking up a lot of talent. Clearly the bank intends to be a much bigger player when the markets recover.
The firm has just hired Ciaran O'Kelly from Salomon to head up global equities trading and has confirmed that it intends to continue to build on equities in 2003. The combination of a large and healthy balance sheet and big equity presence could mean that Bank of America will soon be a tiger with teeth at last and a business that rivals will underestimate at their peril.