|‘We’ve been changing the culture in our business,’ Brian T. Moynihan said at a Sept. 14 investor conference.|
Bank of America CEO turns to old colleagues
CHARLOTTE, N.C. — Bank of America Corp. chief executive Brian T. Moynihan, who has promised to change the lender’s culture while retaining most of its senior leadership, has installed three former colleagues at FleetBoston Financial Inc. in influential posts.
Moynihan hired former Fleet strategy head Terry Laughlin as a senior executive at the loss-plagued Countrywide unit. He recruited hedge fund manager Mike Lyons as a strategy and planning executive to help shrink the bank’s $2.2 trillion balance sheet. Moynihan also promoted Lauren Mogensen to deputy general counsel and corporate secretary, where she intersects with Moynihan and the bank’s board.
Each of the three, none of whom report directly to Moynihan, have a longer history of working with him than with their supervisors.
They were part of the team that helped then-Fleet CEO Terry Murray expand into the seventh-largest US lender before Bank of America bought it for $48 billion in 2004.
“Those people are there to tell Brian what is going on and to make sure he doesn’t get stabbed in the back,’’ said Tony Plath, a finance professor at the University of North Carolina at Charlotte. “Having your loyalists installed at the key businesses is part of the culture of banks.’’
Moynihan, 50, is emphasizing execution instead of expansion at the Charlotte-based bank, and promised to focus on shareholder returns instead of gross earnings after his predecessor, Kenneth D. Lewis, bought the largest US credit card, mortgage, and securities brokerage firms between 2006 and 2009.
Bank of America faces “one of the biggest challenges any merger or acquisition team has had to deal with,’’ said Page West, a professor of strategy and entrepreneurship at Wake Forest University Schools of Business. “Moynihan needs to have confidence in the people doing the work.’’
The bank is firing as many as 400 employees in its global banking and markets division after a management review, a person briefed on the matter said yesterday.
“We’ve been changing the culture in our business,’’ Moynihan said at a Sept. 14 investor conference. “The franchise build is over for Bank of America. Now it’s just time to operate.’’
The bank is pruning costs more aggressively than publicly disclosed, Betsy Graseck, an analyst at Morgan Stanley who rates the stock “overweight,’’ said in a Bloomberg TV interview on Sept. 17. “There’s a distinct strategy within each of the organizations within Bank of America to be improving on the expense ratio,’’ she said.
Almost all the senior executives from credit card issuer MBNA Corp. and home lender Countrywide quit or were replaced by veteran Bank of America managers before Moynihan became CEO.