|
 He has taken more direct control over the bank's retail business and
shifted executives into new positions, sources familiar with the
matter said. He has ordered officials at every level of the bank to
think harder about how to sell more products to existing customers,
a practice that many banks have tried but few have successfully
executed.
Moynihan has also helped reshape the board, and his sway with
directors only increased when he became chairman earlier this month,
the sources said.
The broad changes that he has made signal that he is planning to
remain at the bank for the long haul, a minimum of five years, they
said.
Some investors have speculated that once Moynihan, a lawyer by
training, was done with legal settlements linked to the 2008-2009
housing and financial crisis, he would head for the exits.
Sources at the bank said that notion was false. Key investors fully
support Moynihan as well.
"Brian has done a superb job of taking the B of A back to basics and
clearing up the problems from the past," Warren Buffett, chairman
and CEO of Berkshire Hathaway Inc <BRKa.N>, wrote in an email to
Reuters. "He is exactly the right CEO to move the company forward
and has the ingredients in place to do so." Berkshire Hathaway owns
Bank of America preferred stock and warrants to buy 700 million
common shares.
Some media outlets have speculated that when Moynihan does leave,
Tom Montag, chief operating officer, will be in pole position to
take the CEO spot. The sources at the bank dismissed that
speculation, noting that Montag, 57, is older than Moynihan, 55, and
that Moynihan is inclined to groom younger successors.
Results the bank posted on Wednesday underscore how much work
Moynihan still has to do. The bank posted a $70 million loss for
common shareholders, after setting aside an extra $5.6 billion to
cover a settlement with the Department of Justice over shoddy bond
mortgage underwriting.
That settlement is only the latest in a string: since 2010, Bank of
America has agreed to pay more than $70 billion to resolve legal
disputes and buy back bad mortgages linked to the financial crisis.
The bank's total tally of settlements seems to rise every quarter,
to the chagrin of investors.
While the bank is hopeful that the worst of the settlements is
behind it, its latest results show that its challenges extend beyond
legal costs. Its revenue is stagnant, having hovered around $21
billion per quarter since 2012.
Moynihan is trying to boost the top line by selling more products to
existing customers. The bank is pitching credit cards and home
equity loans to its checking account holders, and is talking to its
corporate borrowers about treasury and retirement-planning services.
[to top of second column] |
These are standard moves for the head of a retail bank, but Bank of
America is trying to take them a little further. In early October,
it began offering a rewards program nationally to customers who do
more business with the bank. Some of the perks include discounted
rates on mortgages and home equity loans and greater benefits on
credit cards. That program was launched in a few markets in June in
a pilot program.
BIGGEST PROFIT ENGINE
To help ensure that his strategy is being properly implemented,
Moynihan began directly overseeing retail banking - Bank of
America's biggest profit engine - earlier this year.
The heads of the retail banking group, Dean Athanasia and Thong
Nguyen, had been reporting to David Darnell, a co-chief operating
officer who oversaw all retail-facing businesses. In August, the
bank said Darnell was becoming a vice chairman, and Athanasia and
Nguyen, would instead report directly to the CEO.
Athanasia is co-leading the retail bank from Boston, a change for a
group that had long been based in Charlotte, where Nguyen works.
Moynihan sees younger executives like Athanasia and Nguyen as among
his possible successors, sources said, although there is no
front-runner for that role.
Moynihan worked with Athanasia and Nguyen at FleetBoston, which Bank
of America bought in 2004. Other FleetBoston executives have also
been given top roles, including Terry Laughlin, who was chief risk
officer until his appointment as president of strategic initiatives
in April; Anne Finucane, the global chief strategy and marketing
officer; and Christine Katziff, the bank's chief auditor.
While Moynihan has reshaped the executive ranks, he has also helped
shape the board: Eight of the 14 current directors, including
Moynihan, have joined since he became CEO in 2010. A ninth, Charles
Gifford, was chairman and chief executive of FleetBoston.
(Reporting by Peter Rudegeair, Editing by Dan Wilchins and Ross
Colvin)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
