[ by Melanie Gretchen ]

Wall Street is going to have cut it out.

Unfortunately for the big banks, "it" means an addition to the 26,887 jobs cut in 2012 through August – 18% more jobs than eliminated last year, according to research firm Challenger, Gray & Christmas.  Nomura bank analyst Glenn Schorr detailed the current state of affairs in a recent report.

• Many banks, which are still overstaffed, need a more liberal wielding of the ax to squeeze out more profits in the coming years, amid a global market that continues to look sluggish.
• Big banks like JPMorgan Chase, Credit Suisse, UBS AG, and Barclays have actually added jobs over the past 3 years. Goldman Sachs and Morgan Stanley have only slashed about 1 and 2% of their work forces, respectively

“While overcapacity is weighing on returns under the current environment, most bank managements have been in the camp that the industry is currently experiencing a cyclical rather than secular downturn.  So they’ve been slow to do too much on the head-count front," when it comes to layoffs. -- Mr. Schorr, in the report, referring to banks' incorrect assessment of the situation.

Not a Minority Report. Unfortunately, for the banking industry, Mr. Schorr is not alone.  42% of market experts are predicting that overall bank revenues for the full year 2012 could be down by as much as 5% compared with last year.  They predict that the economy will cause banks including JPMorgan, Bank of America, Goldman, and Morgan Stanley to generate single-digit returns on equity compared with the 20% ROEs some enjoyed during boom times.  For its part, BofA, said that it may take a roughly $3 billion hit to its bottom line from a $2.3 billion settlement as well as an accounting adjustment resulting from an improvement in its credit spreads.  [C-I Note: Ouch.]

For further details, go to [NY Post, 9/30/12].