Embattled Bank of America Corp shook up its management ranks on Tuesday, announcing that two key officers would leave and promoting two others to share the chief operating officer role.
It’s the latest effort by Brian Moynihan, the CEO since early last year, to turn around a company that was once an industry stalwart, but is still struggling under the weight of toxic mortgage loans. He took over the bank after predecessor Ken Lewis stepped down amid controversy over his purchase of Merrill Lynch.
Among the changes announced late on Tuesday:
‧ Sallie Krawcheck, head of global wealth and investment management, is leaving. A Citigroup veteran, she was hired in late 2009 toward the end of Lewis’ tenure.
‧ Joe Price, president of the consumer bank, will also leave. He was the chief financial officer under Lewis. Moynihan moved him to run the retail bank, Moynihan’s old job, last year, and Moynihan at the time said the change represented his confidence in Price.
‧ David Darnell, a longtime Bank of America veteran who was elevated to the top ranks by Lewis, will become co-chief operating officer. He will share the newly created position with Tom Montag, who joined Bank of America when it bought his employer, Merrill Lynch, at the start of 2009.
Darnell, previously the president of commercial banking, will be responsible for consumer-targeted units including mortgages, wealth management and small business.
Montag, previously the president of global banking and markets, will be responsible for the business units that serve companies and institutional investors, including commercial banking, the trading businesses and Bank of America Merrill Lynch Global Research.
The changes mark one of Moynihan’s most dramatic moves to reshape the bank. Banking consultant Bert Ely said he wondered if the changes were driven by Berkshire Hathaway chairman Warren Buffett, who announced on Aug. 25 that he would invest US$5 billion in the bank. He also received options to buy Bank of America stock at US$7.14 per share, options that were under water at the close of business on Tuesday, when shares were at US$6.99.
“I cannot imagine that Buffett is in Omaha just sitting idly by,” Ely said.
Moynihan said in a statement that the moves were a way to streamline the bank’s operating units to serve its key customer groups: individuals, companies and institutional investors.
The reorganization is effective immediately, and Moynihan called the changes “a significant step in the continued transformation of our company,” which has also included at least 6,000 job cuts announced this year out of a workforce of 288,000.
Bank of America’s shares fell 3.6 percent on Tuesday to US$6.99. However, they rose US$0.02 in after-hours trading after the management announcement was made.
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