New York, January 25 (FinanceEnquiry.com) - Compensation cuts including cuts in salary and bonus of about 25 percent from last year are likely for investment bankers of Bank of America Corp (NYSE: BAC). The second-largest U.S. lender by assets gave this warning to its investment bankers ahead of formal 2011 pay discussions scheduled for this week.
 
Pay cuts for investment bankers and traders are becoming more widespread in Wall Street firms due to revenue and regulatory pressures. CEO Moynihan of Bank of America is in the process of cutting costs after the bank’s stock plunged 58 percent last year. Investment bankers with several years of experience typically earn about half a million to several millions.

The global banking and markets unit of Bank of America had about 12,000 people in the beginning of 2011. The division lost $443 million in the fourth quarter after it lost $302 million in the previous quarter. In 2011, annual profit dropped to $2.97 billion from $6.3 billion in 2010.

The bank said that the drop in performance was the result of Europe’s economic crisis and the effects of the downgrading of U.S. credit rating by Standard & Poor’s. Moynihan is planning to cut annual costs by as much as $3 billion from investment and commercial banking, trading, and wealth management units in addition to the $5 billion targeted from retail and back-office operations, which will mostly be realized by making 30,000 job-cuts.