Management Turnover as Change Agent

Thursday, October 18, 2007

BofA CEO Stays Above the Fray of Falling Earnings

Unlike CitiGroup, Bank of America's latest drop in earnings (32%) does not translate into job risk for the bank's CEO, Ken Lewis. In a piece by Ben White in today's Financial Times Lewis is quoted during yesterday's conference call indicating there will be changes at the bank (jobs and management responsibilities).
Ken Lewis, chief executive, said he would review every business that led to the dismal third quarter performance, which was much worse than analysts expected.

“What I can’t say is that we will stay the course and go forward as we have in the past,” he said. “The probability of changes and elimination of some businesses and infrastructure reassessment is very high.”
In a piece by David Mildenberg on Bloomberg he stated that during yesterday's conference call Lewis said
... the company plans to scale back its investment banking unit after trading mistakes led to $717 million of losses.
Keep an close eye on what Lewis and top management do to address the earning problems facing the bank. Unlike Prince, Lewis has been a master until now at managing BofA.

For more see:

Independent UK
DealBook
Reuters
SeekingAlpha
Times Online UK

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