The move by Bank of America and Nomura to shed large numbers of jobs is just scratching the surface of a redundancy wave that is set to hit the banking sector, Simon Maughan, financials sector strategist at Olivetree Financial Group, told CNBC on Friday.
Bank of America and Nomura are “just going where the rest will have to follow,” Maughan said. “There’s a cyclical element to which BofA is responding, exaggerated by the regulatory cycle.”
Maughan’s comments come as Nomura started to make wide-ranging cuts in its European investment banking division on Thursday, according to CNBC sources, with up to 30 percent of jobs at the division set to go.
The bank was also closing its Swiss mergers and acquisitions (M&A) coverage.
Meanwhile, Bank of America is planning to cut 16,000 jobs by year-end as part of the firm’s company-wide cost-cutting initiatives amid declining revenues, the Wall Street Journal reported on Thursday.
Maughan expects Barclays to be the next bank to announce wide-ranging cuts and said that he would not be surprised if UBS, Credit Suisse and Goldman Sachs announced cost-cutting plans in the next quarter.
In recent years, big banks have sought to make their operations more global.
Nomura bought Lehman Brothers’ European operations in 2008 following its collapse, and Bank of America acquired Merrill Lynch at the height of the 2008 financial crisis.
“Going global is extremely difficult,” Maughan said, and noted that Nomura has experienced that “the Japanese way of doing business in financial markets cannot be exported elsewhere in the world.”
Last week Deutsche Bank announced it planned 4.5 billion euros ($5.8 billion) in annual savings by 2015.
Goldman Sachs also announced last week that it would end its a two-year training program for recent college graduates after running it for a quarter of a century.
The training program, hailed as the golden ticket for a successful career on Wall Street, was not meeting its aim of retaining new talent, the U.S. investment bank said.