Bank of America's new structure and the importance of the sales guys

Tomorrow is Bank of America's investor day. As the Financial Times and others are pointing out, it's the first investor day that Bank of America has held for 14 years, and comes as BofA's share price has dramatically underperformed rivals like JPMorgan's. BofA needs to sell its strategy, including for the markets business, where a leadership shakeup was announced last Friday.

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Revenue growth in Bank of America's sales and trading business has been steady but not exceptional in the past year: equities revenues were up 13% year-on-year in the first nine months; fixed income revenues were up nearly 10%. BofA's fixed income performance compares to rivals. But at Goldman Sachs, Morgan Stanley and JPMorgan, equities revenues were up 23%, 34% and 32% respectively. The bank is falling behind US peers.

Bank of America's markets business is run by Jim DeMare, an accomplished risk-taker and former mortgage trader at Citi and Bear Stearns who was named co-president of the bank in September. He's a nice guy. "Jim is a superstar," says one ex-MD. "His career has gone up and up."

Although DeMare is a trader, last week's restructure reflected the importance of the sales function. BofA's global markets business is now being co-run by Denis Manelski, a former head of fixed income currencies and commodities (FICC) sales and by Soofian Zuberi, another former sales guy who's worked across equities and fixed income. 

Meanwhile, Brian Carosielli, a veteran credit trader who joined BofA from Citi in 2007 and who was made head of BofA's huge credit trading business last October, has been unexpectedly moved into a new sales role instead. Carosielli is now head of all sales for the global markets business, which is a bigger job, but a step away from risk taking.

Bank of America declined to comment for this article. Insiders point out that having salespeople running global markets is nothing unusual and that Tom Montag, the former president of the investment bank, also rose up through the sales ranks. 

"Sales guys are better at playing politics," says one trader. "They're better at handling big organisations and structures, at coping with regulatory requirements, and at talking the talk." 

While sales guys front markets businesses, the real power often lies with the risk-takers one level below them. At Bank of America, that's now Matt McQueen, who's the new head of micro [credit] trading, Laura Chepucavage and Carlos Fernandez-Aller who are heading macro trading, and Glenn Koh and Stuart Bourne who are heading equities. All are traders, except Bourne, who runs the prime brokerage. All have spent years at BofA, except Fernandez-Aller who came from Goldman in 2020. "DeMare doesn't like change," suggests one insider. 

He will nonetheless need to hope last week's changes have an effect. In the memo announcing the shakeup, DeMare observed that BofA's markets revenues have increased for 14 consecutive quarters and risen 40% between the end of 2019 and 2024. That's not bad, but at JPMorgan and Morgan Stanley they were up 44% and 52% respectively over the same period.

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