SAN FRANCISCO - In the wake of deals unveiled by key competitors, Banc of America Securities sought to display momentum of its own - and perhaps make a talent grab - by promising clients on Monday that it would increase coverage and personnel in all major areas of the investment bank.
The San Francisco unit of Bank of America Corp. announced at its annual equities conference here that it would increase the number of stocks it trades by 40%, to 2,500, expand research coverage by 90 to 100 companies, and hire 26 more employees in equities sales and trading.
"We had been in the planning process for the entire summer to expand what we're up to, but the recent consolidation has forced us to say it publicly," said Scott Kovalik, head of equities for the firm.
He was referring in part to last Tuesday's announcement that J.P. Morgan & Co. is to be bought by Chase Manhattan Corp. and last month's announced deal between Credit Suisse First Boston and Donaldson, Lufkin & Jenrette Inc.
"On the distribution side, four of our competitors won't be around in the next nine to 12 months, and it was important to state to the marketplace that our plan is to continue to grow and take advantage of the fact that with people dropping off, we'll continue to take more market share," Mr. Kovalik said.
Outsiders said the company is facing heavier competition. "Bank of America already looked at Chase with some envy, and this will only quadruple that," said Donald McNees, a principal in the global banking practice of Tillinghouse Towers Perrin. The Chase-Morgan deal "puts pressure on Bank of America to make a move if they want to be a significant player," he said.
Monday's announcement was in line with an internal-growth strategy that Bank of America has publicly emphasized over the last year. The parent, struggling to digest more than a decade of mergers - effectively taking it out of dealmaking for the time being - has pinned much of its investment banking success on intensive hiring.
Carter McClelland, the former Deutsche Bank investment banker who in July took charge of Bank of America's New York investment banking operations and assumed responsibilities for equities, said at the beginning of the year that he expected Banc of America Securities to make at least 100 more hires.
Since future investment banking pairings should create a lot of job seekers, "we want to tell people that we are in hiring mode," Mr. Kovalik said.
Banc of America Securities has been trying to expand the industry coverage of its investment bankers and capital markets professionals beyond the emerging-growth sectors that were the specialty of its predecessor, Montgomery Securities, which NationsBank Corp. acquired in 1997.
The broadened coverage would better reflect the more diversified corporate clientele of the new Bank of America. (In 1998 NationsBank, of Charlotte, N.C., acquired BankAmerica Corp. and changed its name to Bank of America Corp.)
Over the last nine months institutional salespeople from Montgomery Securities' old haunts in the TransAmerica Pyramid building have been moving to a smattering of Bank of America offices across the country, including Atlanta, Boston, New York, and a new office in Chicago. The firm plans to open a Houston office by Oct. 1 and is considering placing a private client group in Los Angeles, Mr. Kovalik said.
This marks a change from the firm's former position, he said. "At Montgomery, part of the strategy was to have only one location - San Francisco."
And much of the additional stock support will come from new research analysts covering firms not previously followed by Montgomery. The firm plans to hire eight or nine new analysts, Mr. Kovalik said.