New bank CEO pledges steady helm
By Ieva M. Augstums |
December 18, 2009, Friday
|
Print Edition
Print Edition
BANK of America's new CEO Brian Moynihan says he doesn't expect a major shift in strategy at America's largest bank when he takes over from Ken Lewis on January 1. But with losses continuing to mount amid double-digit unemployment rates, it remains to be seen whether investors will stay the course.
Bank of America's board named Moynihan, 50, as its new president and CEO late on Wednesday, promoting him from consumer and small business banking chief.
Overall, it's a smart move, feel many analysts. "My concern about bringing in an external candidate was that somebody would come in and feel the need to put their stamp on the company through a restructuring or through a period of turbulence," said Nancy Bush, managing member of NAB Research in Annandale, New Jersey.
"The bank just doesn't need that right now. An internal candidate who knows the players and who knows what needs to be done ... is probably a wiser choice at this point," she said.
Analysts have said outside candidates likely would have wanted to break up the company, something Bank of America's board reportedly is reluctant to do.
"Brian's wide range of experience, his relationships inside and outside of the company, and his demonstrated ability to understand business dynamics and effect constructive change made him the best person for the position," said Bank of America Chairman Walter E. Massey, who led the CEO search for months.
Massey said that while the bank did consider external candidates, the board decided that Moynihan's experience was as good or better, "and he offered the advantage of a smooth transition."
Moynihan told The Wall Street Journal that he doesn't plan to exit any current businesses, nor does he foresee making any major changes to the bank's strategy.
"Clearly, customers and clients have benefited from the franchise Ken Lewis, Hugh McColl and others have built over the decades. Our business model has also worked for shareholders," he said. "What we need to do now is very simple. We need to execute." Moynihan joined the bank in 2004 from FleetBoston Financial Corp.
Bank of America's board named Moynihan, 50, as its new president and CEO late on Wednesday, promoting him from consumer and small business banking chief.
Overall, it's a smart move, feel many analysts. "My concern about bringing in an external candidate was that somebody would come in and feel the need to put their stamp on the company through a restructuring or through a period of turbulence," said Nancy Bush, managing member of NAB Research in Annandale, New Jersey.
"The bank just doesn't need that right now. An internal candidate who knows the players and who knows what needs to be done ... is probably a wiser choice at this point," she said.
Analysts have said outside candidates likely would have wanted to break up the company, something Bank of America's board reportedly is reluctant to do.
"Brian's wide range of experience, his relationships inside and outside of the company, and his demonstrated ability to understand business dynamics and effect constructive change made him the best person for the position," said Bank of America Chairman Walter E. Massey, who led the CEO search for months.
Massey said that while the bank did consider external candidates, the board decided that Moynihan's experience was as good or better, "and he offered the advantage of a smooth transition."
Moynihan told The Wall Street Journal that he doesn't plan to exit any current businesses, nor does he foresee making any major changes to the bank's strategy.
"Clearly, customers and clients have benefited from the franchise Ken Lewis, Hugh McColl and others have built over the decades. Our business model has also worked for shareholders," he said. "What we need to do now is very simple. We need to execute." Moynihan joined the bank in 2004 from FleetBoston Financial Corp.
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