Nearly eight years after Bank of America purchased Merrill Lynch, one of the nation's leading bank analysts, Dick Bove, recently wrote that "Bank of America is simply blowing up the Merrill franchise presumably because it does not like the business or it does not know how to manage it."
Fox Business reports that Bove based his conclusion largely on an analysis of Bank of America's trading division. Since 2010, the unit's revenues, most of which stem from its Merrill Lynch franchise, have fallen from $10.1bn a year down to only $6.5bn. That equates to a 36% drop.
Even more telling, Bank of America generated more trading revenue in 2010 than any other major Wall Street bank, with the exception of Goldman Sachs. The same year, for instance, JPMorgan Chase, which is widely viewed as the nation's premier universal bank, generated 6.5% less trading revenue than Bank of America.
Flash forward to today, however, and the roles are reversed.
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