Amidst A Slump In The Industry, Bank Of America Trims Its Banking And Lending Businesses

Bank of America Corp. is cutting its wealth management, banking, and lending division as Wall Street business is still being negatively impacted by increasing interest rates, prompting banks to make deeper cuts.

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According to those with knowledge of the situation, a small number of employees—including some loan officers—were let go while less than 200 were offered new positions in other departments of the corporation. The impacted parties' salaries will remain the same, but bonuses will change depending on their new duties.

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A Bank of America spokeswoman stated in an email that "as our company and customer demands expand and adapt, our focus remains to be on matching our staff to areas of highest need." We are realigning personnel to support certain sectors based on the state of the market.

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The hiring process has slowed down at several lending companies as a result of higher rates. Competitors JPMorgan Chase & Co. and Wells Fargo cut hundreds of home lending employees after the Federal Reserve hiked interest rates, cooling what had previously been a scorching hot housing market.

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Unlike other companies in the sector, Bank of America has refrained from making significant employment cuts. The Charlotte, North Carolina-based corporation began instructing executives to freeze hiring earlier this year, save for the most critical positions, as it attempts to control expenses and get ready for a potential economic slump. The relocation in the loan industry follows the choice last year to reduce hiring as fewer workers left on their own volition.

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During the financial crisis of 2008, the biggest US banks mostly came to the conclusion that moderate use of mortgages was best. Tens of billions of dollars in liabilities, primarily related to the purchase of failing subprime mortgage lender Countrywide Financial Corp., were resolved by Bank of America through a series of judicial settlements.

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After a boom in lending during the initial half of 2022, banks have pulled back from financing buildings and other commercial property amid falling demand and rising rates. According to a report at the time by Trade Algo, the firms increased their level of scrutiny and tightened borrowing conditions in the second part of the year while offering less new commercial property loans.

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