[ by Melanie Gretchen ]

Bank of America is not taking the banking industry's slump well.  The Wall Street Journal reported a document provided to top management that described the details of the 16,000 job cuts to occurr by the end of December – more than half of the 30,000 layoffs it had previously said would take a "few years." 

Downgrades so far:

• The closing of 178 bank branches last year
• Plans to close 200 branches this year, according to a person familiar with the matter

Anthony Polini, an analyst for investment firm Raymond James, saw BofA's plans in a different light.  Even with the possible job cuts and branch closures, the bank will still be considered the largest retail bank, Polini said, with a strong presence coast-to-coast.

Rather, he sees Bank of America's activity as "another phase of expense control."  Affecting banking profitability:

• The environment of low-interest rates (the Federal Reserve has committed to keeping the federal funds rate near zero at least until 2015)
• Regulatory issues
• The capital requirement burden, with banks required to have higher capital ratios as a result of the financial crisis

In addition, he said the closure of bank  branches is likely to persist in the industry as more customers bank online and on smartphones.

"There is no country more overbanked than the U.S.  I don't know what you see more of in New York City: Starbucks or bank branches."

For further details, go to [ABC, 9/23/12].