BoA Merrill Lynch Asia head says integration is working

Kim Hong, president, Asia-Pacific for Bank of America Merrill Lynch, points to a series of hires the bank has made and talks about his plans to play off the strengths of the combined banks.

Six months after Kim Hong took on the role as president, Asia Pacific for Bank of America Merrill Lynch, he's looking relaxed and confident. "In Asia, the merger is past tense; the integration is past tense," he recently told FinanceAsia of the marriage of the two American banks' businesses. 

"The melding of the corporate banking approach and the investment banking model has provided clients with an unparalleled platform," said Hong. "We're now able to provide clients with their every need from tactical conversations to strategic dialogue and everyday plans."

He acknowledges there will be more hires and more folks may depart Bank of America Merrill Lynch but the big-picture structure is in place. Additional people moves will be more in line with the standard ebb and flow of talent that is always the case in finance.

Hong, a Korean national, has spent the bulk of his career in Asia. He joined BoA in 2007 as head of global markets for Asia. In July 2008, he was appointed president of Asia-Pacific where he was responsible for BoA's overall businesses in 12 countries across the region. Prior to joining BoA, he was with J.P. Morgan, where he spent seven years in Hong Kong, Korea and Singapore. And before that, he worked at Citibank and Bankers Trust, where he was regional co-head of investment banking.

Hong took on the job after a series of turnovers just as the merger got underway. Obviously, the pressure was on Hong to make his appointment work. While it's still early days, one colleague said, "I'm still here because of him" -- another added that he has a background in corporate and investment banking "so he knows what he's talking about and that has won him respect from all quarters".

One of his supporters is Jayanti Bajpai, who is head of Asia-Pacific (ex-Japan) corporate and investment banking. He comes from the Merrill side of the business. "Clients have stayed with us," said Bajpai. "They want more services and they want alternatives and we can provide that."

He added: "It's good to be able to go to clients with a more diversified product spectrum. In the past, we weren't always able to provide the full array of products which now we can."

Bajpai is a Merrill veteran of more than 22 years, joining the Wall Street firm in 1987 based in New York as part of the corporate finance team. In 1994 he moved to Singapore to join the Indian coverage effort working closely with DSP Merrill Lynch. Five years later he relocated to London and became co-head of Europe, the Middle East and Africa (EMEA) corporate finance in 2002. He was promoted to chief operating officer of EMEA origination in 2006 then became head of India investment banking in 2007, taking on the role of head of Central Eastern Europe, Middle East & Africa investment banking as well. 

Both Bajpai and Hong were keen to point out that the marriage of the two businesses in Asia resulted in little to no overlap on the banking front, with the exception of the fixed income desk and support services. Merrill Lynch had the established investment banking brand that BoA had been seeking for some years; BoA brought to the table corporate banking -- from cash management and trade finance to the ability to come to the investment banking team's table with financing.  

The slew of departures since the merger and as a result of the financial crisis has been headline news, but the bank has also been busy hiring -- more than 100 people in the past two-and-a-half months in "every line of business we're in" said Hong. 

Recent arrivals include: Junichi Shiroshita as a managing director in Japan investment banking; Guy Foster, who was hired from UBS to head the equity capital markets team in Australia; Stanley Wong as head of Hong Kong and China sales; Tim Rocks as head of Australia equity strategy; and Goldman Sachs's Kenneth Whee as co-head of Asia-Pacific energy equity research and head of petrochemical and refining research in the region. In the wealth management space, the bank has also been hiring financial advisers for its China and India businesses.

While neither Hong nor Bajpai want to come across as sounding dismissive of other countries, the four key pillars of the Bank of America Merrill Lynch Asia business plan are Japan, China, India and Australia. And so they are investing in each country to bring them up to snuff. For example, in China the cross-border M&A flows are rising dramatically, so "global connectivity is crucial", according to Bajpai. And in Australia the firm wants to make sure its equity team is providing enough products for its private banking business to sell. 

"We're busy working across businesses and leveraging our markets platform -- from equity sales to commodity sales," said Hong, explaining that hitherto "two-thirds of our clients were only doing business with one of those desks, now we are making sure we offer them more options. The combined bank is more global than either bank was before."

The irony is that other banks that touted the "integrated banking model" for years are now considering carving away some of their businesses and talking about "getting back to basics". But both Hong and Bajpai say they see the integrated banking model as the most sensible way forward, in no small part because Asian clients are far more international and need a greater array of banking services than they did just a decade earlier.

"You have to be relevant to your clients needs and for their strategies. Our clients want advice on cross-border M&A, which means they need the best advice on capital raising, the best spreads on capital raising, and the best cash/trade services to go with it," said Hong. "And quite often in Asia it is one person making the decision in all three of these areas. We want to be that first port of call for these clients."

So the plan is to continue to develop the business across the region, but also to build out the product teams. "You need to know the right people in the right industries," said Bajpai. "On the back of our M&A business there will be significant financing requirements. Before we couldn't compete as effectively, but now we can."

The first half of 2009 has also gone better than expected in terms of league tables. The bank ranked number three globally in the amount of fees earned in the first six months of the year, according to Dealogic. It also had top five rankings in global M&A, global equity capital markets, global bond sales, and US syndicated loans. 

"The integration has been extremely quick," said Bajpai. "Asia continues to be an increasingly important driver of the bank's international business."

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