Tags: New | BofA | CEO | Moynihan | Execute

New BofA CEO Says Wealth Unit Not For Sale

Friday, 18 Dec 2009 08:33 AM

Brian Moynihan may be about to run the largest U.S. bank at a time of massive change in the crisis-damaged industry but he seems to be restricting his public comments about strategy to one word: Execute.

Moynihan, who was named CEO-designate of Bank of America Corp on Wednesday night, used the word roughly a half-dozen times in a speech to a packed audience of nearly 1,000 cheering bank employees in a downtown Charlotte theater on Thursday.

"It's just about execution," he said.

And he used the word at least three times in interviews with major news organizations on Wednesday night.

The on-message focus on the word by Moynihan suggests a departure from the style of current CEO Kenneth Lewis, who was best-known for his deal making.

Lewis engineered large takeovers for much of his nearly decade-long stay in the job. In 2004, the bank bought FleetBoston Financial for $47 billion, an acquisition that brought Moynihan to the company. Lewis also bought U.S. Trust, credit card issuer MBNA, Countrywide, and brokerage Merrill Lynch, a deal which Moynihan helped to negotiate.

Moynihan says that Lewis has built a company that has huge global presence.

"There isn't a market we can't transact in, and a place we can't get capital," Moynihan said to the audience.

Still, he signaled that repairing current businesses rather than buying new ones was on the top of his agenda.

"We don't have to think about buying something," Moynihan said.

Among the tasks ahead are the further integration of brokerage Merrill and mortgage lender Countrywide, both bought in the past two years.

Moynihan said he has no plans to sell the bank's U.S. Trust private wealth unit, which it bought in 2006 for $3.3 billion and which some analysts say now duplicates much of the same work done by Merrill.

The various parts of the Bank of America's business — which now sprawl from the mortgage business based in Calabasus, California to the credit card division in Wilmington, Delaware — must learn to operate as one, unified company.

Moynihan, 50, must grapple with increasing credit problems for the bank, where credit card delinquencies are near the top of the industry and mortgage and consumer loans problems are growing.

That's a tall order for a lawyer turned investment banker who served as the head of Bank of America's head of retail banking for less than a year.

Moynihan also must navigate the company through its on-going legal probes into the heavily scrutinized Merrill Lynch purchase.

The bank has a looming case brought by the U.S. Securities and Exchange Commission, scheduled for early next year around its disclosures during the Merrill Lynch deal, and the U.S. Congress and New York Attorney General's office are also probing the deal.

Critics say his relative lack of long-term banking experience may not clear the bank's operational hurdles.

"It seems like the board is rewarding failure," said John Finger, of Houston-based Finger Interests Ltd.

The family investment firm, which owns Bank of America shares, has been campaigning against Moynihan's appointment and sought an outside candidate to succeed Lewis.

It is not clear how many outside candidates were interested in the spot. Kenneth Lewis, the bank's departing CEO, said at an employee meeting on Thursday that Moynihan had a rare quality.

"He wanted the job," Lewis said, drawing chuckles from the crowd.


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Brian Moynihan may be about to run the largest U.S. bank at a time of massive change in the crisis-damaged industry but he seems to be restricting his public comments about strategy to one word: Execute. Moynihan, who was named CEO-designate of Bank of America Corp on...
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Friday, 18 Dec 2009 08:33 AM
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