Next CEO at B of A has big job
Written on October 3, 2009
The CEO who succeeds the departing Ken Lewis at Bank of America Corp. will have plenty of work to do, including mending relationships with regulators and investors after the animosity that followed the acquisition of Merrill Lynch & Co. last year.
Banking analysts don’t have a strong consensus about who will become CEO when the embattled Lewis leaves Dec. 31. The Bank of America executive mentioned most often is Brian Moynihan, who heads the company’s largest division: consumer and small-business banking. But analysts say former CEOs of banks including Wachovia Corp. also could be candidates.
The new CEO faces some daunting tasks. He or she must juggle regulatory investigations into the Merrill acquisition, including federal and state demands for information about the billions in bonuses paid to Merrill employees just before the acquisition was sealed. The bank also needs to return to a good relationship with regulators and improve its standing with members of Congress who have sharply criticized Lewis and the bank for much of the nine months since the Merrill deal closed.
The bank under Lewis has fought the Securities and Exchange Commission and New York attorney general, who have charged that Bank of America officials misled shareholders about the Merrill acquisition, including the bonus payments.
The new CEO also has to find a way to repay $45 billion in government bailout funds so it can operate without the restrictions, including limits on executive pay, that come along with the money lowest fee payday loans.
Getting the money to repay those loans might be difficult because of the rising loan losses with which Bank of America, and banks across the country, is contending.
The new CEO must resolve the legal and regulatory problems that grew out of the Merrill deal. Meanwhile, New York Attorney General Andrew Cuomo is expected to file charges related to bonuses against the bank and several high-ranking officials.
Bank of America could be considering hiring a temporary CEO that would stay for about two years before naming a long-term replacement, according to a Wall Street Journal report Thursday that cited anonymous sources. Bank spokesman Robert Stickler responded to the report saying, "Nothing is off the table," in terms of potential hiring options.
Bank of America has is the second-largest bank in St. Louis, measured by deposit market share. It has about 61 offices and about 2,700 employees in the St. Louis area.
Jim Gallagher of the Post-Dispatch
contributed to this report
Filed in: legal.