President and CEO of Bank of America Brian Moynihan.Fernando Morales/The Globe and Mail
Bank of America Corp. is looking to reduce its annual expenses by $5-billion a year by 2013 through its major cost-cutting initiative, chief executive officer Brian Moynihan said.
Mr. Moynihan said the program – known as New BAC after the company's ticker symbol – is focusing on consumer banking and the bank's systems architecture. The company built itself through acquisitions over decades and has not properly integrated systems and closed unnecessary branches.
Bank of America had 5,700 branches nationwide and 287,000 employees as of June 30.
Media reports on Friday said the bank was targeting 40,000 job cuts over the next three years as part of the program.
The bank is targeting an expense to revenue ratio to 55 per cent and is cutting from roughly $73-billion in annual expenses.
Bank of America has about 50 senior employees reviewing some 150,000 ideas for cutting costs, Mr. Moynihan said.
Mr. Moynihan disclosed details of the New BAC program at a Barclays Capital financial services conference.