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Bank Of America Said To Send Property Reviews To India

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http://www.bloomberg.com/news/2013-06-27/bank-of-america-said-to-send-property-reviews-to-india.html

Bank of America Corp. opened a unit in India to review home-valuation reports as it seeks to rebuild share in U.S. mortgages at a lower cost, said four people with knowledge of the move.

Workers in the new Bangalore office follow checklists to determine if appraisals are complete, said the people, who requested anonymity because they weren’t authorized to comment. The firm also eliminated jobs of licensed U.S. workers in its LandSafe business, the appraisal division of the Charlotte, North Carolina-based company, which made $78.7 billion in loans last year, the people said.

“One of the biggest problems in the mortgage business is all the paperwork involved, and how do you engineer it to reduce the bottlenecks,” said Bert Ely, an independent banking consultant in Alexandria, Virginia. “With offshoring, the potential for problems is always there, but it’s hard to be critical for trying to minimize costs.”

Lenders around the world have vowed to boost revenue and curb spending to make up for sluggish loan growth and new regulations. Bank of America, which spent more than $45 billion to settle disputes tied to defective mortgages and foreclosures, is among the most aggressive cost-cutters with Chief Executive Officer Brian T. Moynihan planning to save $8 billion a year. The firm slipped from being the biggest U.S. mortgage lender in 2008 to fourth last year.

Other firms have added staff in lower-cost cities. Goldman Sachs Group Inc., the New York-based investment bank, saw headcount in places including Bangalore and Salt Lake City almost double since 2007 to 22 percent of employees, CEO Lloyd Blankfein said in November. Barclays Plc (BARC) said today it planned to move 4,000 more jobs overseas and to lower cost locations by 2015 to save as much as 250 million pounds ($381 million).

And yet the same bankers will expect profits to keep rolling in from people earning less...

Still you can't be the logic of constantly cutting costs to boost profits, it's not desperate.

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And yet the same bankers will expect profits to keep rolling in from people earning less...

Still you can't be the logic of constantly cutting costs to boost profits, it's not desperate.

In a functioning capitalist economy, if labour costs are an issue then you deploy capital to automate processes and hence create more value per worker (even if those workers are paid more - you either sell more or employ fewer). This leads to a virtuous circle of higher pay, higher profits and lower (real terms) prices.

Offshoring breaks this circle by disconnecting improved profitability from improved pay, and is therefore not economically sustainable.

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  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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