Magazine article American Banker

And Another: Fleet Slashing Costs

Magazine article American Banker

And Another: Fleet Slashing Costs

Article excerpt

FleetBoston Financial Group has joined a growing list of banking companies that are telling employees to cut back on travel, outside professional services, and other discretionary expenses as the economy sputters.

The company told senior managers last Friday to keep a tighter rein on expenses "in an effort to protect the bottom line," a spokesman said. Like other banks, Fleet is reacting to a slowing economy that is threatening revenue growth in some of its key businesses, namely in investment banking, private equity, and other corporate banking activities.

Fleet does not want to resort to mass layoffs, the spokesman said. "We want to avoid impacting customer service, which is a top priority for the company at this time, and we want to minimize the possibility of staff reductions."

Still, analysts said, job cuts are likely, particularly in capital markets. Institutions up and down Wall Street -- and Main Street banks that have tried to become more like them -- have been hiring aggressively for the last two years to keep pace with booming demand for underwriting, advisory, and credit services. That demand has all but disappeared since the slump in the stock markets began last year.

Investment banks with big technology units, including Fleet's Robertson Stephens & Co., in San Francisco, could be hit hardest, analysts said. "Everyone has Plan B in their desk drawer," said George Bicher, an analyst at Deutsche Banc Alex. Brown. "It's a cyclical business, like making cars. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.