Skip to main content

The dwarf that may swallow the giant

Bank of America is a big bank. In terms of total assets almost twice as big as Merrill Lynch that BoA is acquiring as a result of the unexpected deal arranged last month (USD 1,716 bn vs 966 bn; source: Google Finance). And in terms of the current market cap, BoA is four times bigger. A giant and a dwarf, one might say. So, the deal looks logical in the American context.

Not necessarily so in Japan, where BoA's both corporate and investment banking offices fit comfortably at the 15th floor of Sanno Park Tower, mostly known among financial professionals in Tokyo, as home to Deutsche Bank Securities; whereas ML has its iconic bull logo several feet across on the side of its office in Nihonbashi Ichome Bldg, an office in Osaka and several joint offices with Mitsubishi UFJ across the country. It is no coincidence that ML is so big in Japan. ML bought Yamaichi Securities in the late 90s, and the employees of the failed Japanese securities house are still the backbone of ML's Japanese business.

So, it is no surprise that some of BoA employees in Japan are scared to lose their jobs. The dwarf may swallow the giant after all.

Comments

Popular posts from this blog

Investment Banking Series: Pitch Books

Investment Banking Series Post 3 Pitch Books 1. What is it anyway? A pitch book is the paramount of days and nights of a banker's hard work. It is a marketing tool that tries to set apart basically very similar banks and to support the claim that THIS bank, and NO ANY OTHER should be selected to arrange the deal. They say pitch books used to be actual books, but in the present world they are Power Point presentations printed out and bound in a plastic cover. The main purpose of the pitch book is to deliver two messages to the prospective client: (1) "we understand your business very well", and (2) "when it comes to arranging your deal, we are the best fit". Both claims are usually weak at best, but they are made elaborately and extensively, and the resulting multi page document often looks impressive. 2. Typical structure A pitch book will have varying structure depending on what product is being proposed, but there is a lot of similarities. Below is o...

To everyone leaving comments

Thank you for taking interest in my blog, I appreciate your comments. Please be informed that I enabled comments moderation, and every comment has to be approved before it is actually displayed. I had to do so because there was a case of inappropriate comments made at my blog, which brought no value to the readers. Therefore, do not be surprised if your comments are not displayed at once. It will take me from some minutes to some hours to read and approve their posting. Thank you for your understanding.