BofA new chief is lawyer, card boss Moynihan
Lawyer Moynihan will have his hands full coping with trouble in Congress, on Wall Street, among consumers and in corporate America
EXPANDED: Bank of America Corp., the largest US bank, named Brian Moynihan its next CEO, replacing Kenneth Lewis, who's leaving this month. Announcement here, and AP story here.
Moynihan, a Brown- and Notre Dame-educated lawyer, wasn't a veteran of BofA builder Hugh McColl's old Charlotte, NC inner circle; he joined five years ago when BofA bought his old employer, FleetBoston Corp. Call it a Boston coup: Ex-Fleet directors on BofA's board picked Moynihan instead of Lewis's preferred candidate, risk manager Gregory Curl, Bloomberg reports here.
Moynihan's risen quickly of late at BofA, where he helped shepherd last year's controversial takeover of Merrill Lynch, currently the subject of federal investigations despite the fact it likely saved Merrill from going under. Merrill is currently propping up BofA's money-losing consumer business, including its Wilmington-based credit card unit, which employs maybe 6,000 locally, down from 10,000 when BofA bought it three years back.
Moynihan took over consumer banking when predecessor Liam McGee left last summer; Lewis had been threatening to reorganize the business. BofA also runs the fifth-largest branch banking system in the Philadelphia area. David Kotok, chairman of Vineland-based Cumberland Asset Management, told Bloomberg the company may end up having to split and sell its business units. Nobody I've talked to thinks it'll sell the card shop.
Under similar heavy pressure from regulators, Citigroup turned to another lawyer, Charles Prince, as its CEO in the mid-2000s. That ended badly - Prince had dealmaking and regulatory skills, but Citi needed tough credit and risk management, plus an able hand for its fractious managers. Prince left two years ago as Citi lost billions and fell under government supervision.
While Citi has shed assets and plans to spin off more, BofA is bigger than ever, with hundreds of US corporate clients and tens of millions of small businesses and consumers. It is Too Big to Fail.