Bank moves 2d key unit from Boston

Bank of America Corp. moved a second major division away from Boston yesterday despite its repeated pledges to keep key business units headquartered here after it acquired New England's largest bank.

The North Carolina bank yesterday unveiled a reorganization that moved responsibility for its small-business banking unit from Boston to Charlotte.

The move marks the second time in the five months since the merger that the bank has broken its pledge to headquarter divisions in Boston. Earlier this year, it relocated oversight of its Latin American operations from Boston to New York.

The bank also laid off hundreds of workers in Fleet bank branches last week, despite executives' statements that ''customer-facing" positions would be safe.

''I don't know if this is the best way to market your bank, by breaking commitments they made prior to the approval" of the merger, said state Representative John Quinn, Democrat of Dartmouth, cochairman of the Legislature's Joint Committee on Banks and Banking. ''They haven't even changed the signs on the New England banks, yet it doesn't appear that they're as committed to Boston now as they were prior to the merger being approved."

A Bank of America spokesman, Bob Stickler, said yesterday that the bank would keep its core commitments to New England -- maintaining the same number of jobs here as Fleet had before the merger. ''Our commitment to New England was that employee levels would be at least at the levels they were pre-merger, and that's still our commitment, and we intend to meet it," he said. ''We have units that account for billions of dollars of revenue based in Boston."

When Bank of America agreed to buy Fleet in October, it promised to carve out a key role for Boston. ''We are proud to join forces in these new markets and will continue to be a large employer and committed corporate citizen in New England," Bank of America chief executive Kenneth D. Lewis said in the bank's announcement of the deal. ''In that regard, wealth management, leasing, Latin America, asset-based lending, small business, and premier banking will be based in Boston."

Fleet's then-president, Eugene M. McQuade, echoed Lewis's commitment to keeping the business units in Boston. ''There is no squirrelly talk going on here," he told the Globe in late October. ''These are real promises."

But McQuade himself would soon be among the first and most powerful former Fleet executives to leave Bank of America. He stunned his colleagues when he announced his resignation in May, saying that his new Bank of America position as president did not give him enough of an ''executive role." Around the time he left, the bank moved oversight of the Latin American operations to New York. Barbara Desoer, who now serves as Bank of America's chief technology, service, and fulfillment executive, said in an interview earlier this year that the move of the division to New York did not mean major changes to the bank's operations. ''There's one person in Boston who's now in New York," she said. ''The rest of the infrastructure remains where it was before."

Boston has long been a key player in Latin American banking; BankBoston Corp., which itself was acquired by Fleet in 1999, has a major presence in Brazil and Argentina, and a former BankBoston executive, Henrique Meirelles, currently serves as head of Brazil's central bank.

The Latin America changes, however, turned out to be only the beginning. Bank of America last week laid off hundreds of employees in Fleet branches despite comments its chief executive, Lewis, made on CNBC in November that any job cuts contemplated as a result of the merger would ''have nothing to do with customer-facing associates, nothing to do at all." But in the branch layoffs, Bank of America did cut employees at Fleet branches, reduce their hours or move them to new positions. The bank plans to replace many of those employees with part-timers or staff for its ''premier bank" for affluent individuals, but many of those hired will not be the same as the people who lost their jobs -- angering former Fleet employees who thought their jobs were secure.

Stickler, the Bank of America spokesman, said Lewis' comments are with what the bank has said all along: That it would ultimately increase the number of employees in ''customer-facing" positions. ''We've been consistent in that we've not been closing branches," he said. ''We're adding to the branch system."

Yesterday's reorganization resulted in the resignation of Bradford Warner, a former high-ranking FleetBoston executive, as president of premier and small-business banking. Warner reported directly to Lewis, Bank of America's chief executive.

Warner said yesterday that although he and Lewis discussed other roles for him at the bank, none of them had the ''scope and challenge" of his previous position. He said that he had planned on staying at Bank of America when the Fleet merger was first announced, but that he respected Lewis's decision to reorganize.

''I said to Ken, as much as I love what I'm doing here, if I was sitting in your shoes it's a very reasonable thing to do," Warner said. He will leave Bank of America with about $20 million in severance.

Bank of America still has a handful of other former Fleet executives in top positions, but some analysts have said it is only a matter of time before they resign as well. Fleet's former chief executive, Chad Gifford, is chairman, and he agreed to stay in that post for two years. Another Fleet executive, H. Jay Sarles, is vice chairman at Bank of America, but his only stated duties are to assist with the merger and to be a ''special adviser" to the chief executive, leaving open the question of whether he will stay after the integration is complete. Fleet's Brian Moynihan heads Bank of America's powerful wealth-management operations, which are still based in Boston. But its ''private bank" for wealthy clients, a major subset of wealth management, is headquartered in New York.

Lee Forker, president of the Boston investment firm New England Research & Management, said he worries Bank of America's wealth-management arm also could move away from Boston. ''I think we'd be well advised to be skeptical," he said. ''There is ample evidence that things we thought would be headquartered here are now moving to New York and Charlotte."

Bank of America's moves in Boston echo events that unfolded after its last big merger, when NationsBank of Charlotte acquired San Francisco's BankAmerica Corp. in 1998. The resulting Charlotte company, which changed its name to Bank of America, had promised to headquarter its global corporate and investment bank in San Francisco but broke the promise a few years later. In that merger as well, a number of San Francisco's top executives left the bank.

Sasha Talcott can be reached at stalcott@globe.com.