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By tote Thu Sep 08, 2011
That's right. BofA will be forming two separate entities. They will also be closing 600 local branches. This news comes on top of the 10,000 job cuts announced just a couple of weeks ago.
According to WCNC of Charlotte, North Carolina [!], (via the huffpo), America's biggest bank will be going back to a Glass-Steagal model with separate commercial and financial wings. This news would bode well, but for two reasons: first, BofA's commercial wing has been in real trouble since the takeover of countrywide and the numerous troubled mortgages on countrywide's books. I smell an excuse to let the financial wing start leveraging again without knowing what the commercial wing is doing, which may not bode well for most of its commerical customers (which I would guess is most of us).
Second, the closing of 600 branches does not bode well for the US jobs market, and is unlikely to do much to improve the decline in BofA's shares either. I don't see any way that this move improves investor confidence in America's largest Bank. This story is still developing, though. I'll have more analysis throughout the day, but for now I wanted to get it out there. More from the intrepid folks at WCNC on some of the internal shakeup:
This announcement comes just days after Bank of America shook up its management ranks on Tuesday, announcing that two key officers will leave and promoting two others to share the chief operating officer role.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, in 2010, 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
If BofA was on deathwatch already, I don't see how this does anything but decrease their chances, but I'm more interested in what you think!
8:34 AM PT: The link seems to have gone down. Here's another story from doc2, making slightly milder claims about the division: http://www.thestreet.com/...
8:45 AM PT: h/t jimstaro, apparently BofA is vehemently denying that anything has changed (short of the shakeups and previously announced 10% of branches closing, with the attendant 10,000 estimated jobs)
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