Bank of America to close investment banking unit

Bank of America will shut its Asian investment banking operation in the next 60 days.

Bank of America has decided to shut its Asian investment banking operation within the next four to six weeks. The decision will affect some 55 professionals in the bank's Hong Kong, Singapore and Bombay offices.

Investment banking at Bank of America encompasses M&A, equity raising and general corporate advisory. Over recent years, the bank has had a hard time over winning the big ticket deals that such a business requires. The firm has no real research capabilities in the region and -- apart from in India -- was having little success securing mandates.

According to Bank of America, Asia president Colm McCarthy in Singapore, the investment banking business at the bank represents only 2% of the Asian headcount and revenue. "It is not a core business," he says. "We felt that it was not worth spending the time and effort expanding that business, especially in these markets."

According to McCarthy, the bank will try to redeploy some of its investment bankers into new areas of focus such as a local debt capital markets business and a new commodity finance and trading team. He stresses that it will not affect the three core business lines that the bank has in Asia, namely debt capital raising, global markets trading, and working capital management. Together, these make up 98% of the bank's Asian revenues.

McCarthy also points put that the closure of the investment banking business will not affect any of Bank of America's "high-priority clients", an admission that the investment banking business had not had the requisite penetration with the big ticket clients.

Investment banking head V. Shankar could not be reached for comment and it is unclear if he will stay with the firm. He was last seen in Jakarta.