Best Bank: Bank of America Merrill Lynch

Terry Flanagan

This Markets Choice Award was presented on Feb. 20.

Bank of America Merrill Lynch’s equities business is emphasizing quality over quantity, and benefits of that strategy showed up in 2013 results.

“We were successful in reducing our reliance on volumes, and we saw evidence of that success across not just execution but also derivatives and our financing business,” said Henry Mulholland, head of Americas equities for Bank of America Merrill Lynch. “Our offering to clients got broader and more seamlessly coordinated.”

While overall equity-trading volume in the U.S. declined 4% to 5% last year, BoAML’s equities revenue in the U.S. and globally revenue was up “significantly,” Mulholland told Markets Media. 2013 was a very solid year for BofA Merrill and the equities business globally.

Mulholland said last year marked a continuation of a plan put in place by Fabrizio Gallo, who joined BoAML in 2011 after a stint at Brevan Howard Asset Management and previously 15 years at Morgan Stanley, where he was most recently head of global equities and proprietary trading.

“When Fabrizio Gallo joined as global head of equities in 2011 he brought with him a strategy to decrease our reliance on traditional volume-based businesses and make our platform more coordinated globally, more impactful with hedge funds and more efficient in our execution,” said Mulholland. “We started to see the fruits of that in 2013.”

Markets overall have continued to be characterized by tepid trading volumes and muted volatility, making for a tough slog for traders as well as trade handlers and trading venues. Tightening regulation has also provided a headwind.

In response to the difficult environment, BoAML and other bulge-bracket banks have pulled in their horns to a certain extent, focusing on the biggest clients and most profitable business. “We reduced our headcount over the past couple years but within that reduction, there was a significant amount of strategic hiring to fill gaps,” said Mulholland, a 25-year veteran of Merrill Lynch and then BoAML equity trading.

“One example of this would be our global portfolio products business, which consists of risk portfolio, agency portfolio, and ETFs, everything from daily trading activity to our relationship with ETF issuers,” he continued. “That business was up significantly, with major market share wins on several events including the Russell rebalance in June. That is a business where two or three years ago, we would not have been in a position to do that.

“These successes have complemented the areas of our businesses where we have been strong traditionally: research, execution, and equity capital markets continue to be drivers of our success,” he said. “We are committed to building on our strengths and providing highly valued services and resources to our clients. We are pleased that clients are viewing BofA Merrill as a place that can meet their needs across advisory, execution, and financing globally.”

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