CHARLOTTE, N.C. (
) -- Now that
Bank of America
has repaid $45 billion in bailout funds and selected a new CEO, the firm faces much bigger and longer-term issues.
Bank of America's board selected
Brian Moynihan to fill in the top role starting Jan. 1. The decision capped months of uncertainty by accomplishing two mammoth goals before year-end: picking a new leader and getting out from under the Troubled Asset Relief Program. Still, Bank of America is not relieved of pressure from regulators and lawmakers who want big banks to split up, or from consumers and taxpayers who are fed up with the banking industry entirely.
Brian Moynihan was selected to replace outgoing Bank of America CEO Ken Lewis, capping months of uncertainty over who will lead the bank in 2010 and beyond.
"As the world has changed, we must continue to be flexible and build on our strong tradition, and change to meet our customers' needs," Moynihan said in a statement Wednesday evening. "We think of this not as changing the business model, but changing the way we do business."
Moynihan, the current head of consumer and small business banking, didn't specify what those changes are, or how they will be accomplished. Perhaps he doesn't yet know, given the constantly changing political winds.
However, the 50-year-old executive has spent a good deal of his time in Washington lately, testifying before a House panel and developing strategic relationships. After serving as a top lawyer, and a top executive in wealth management, corporate and investment banking and consumer banking, it's hard to argue that he's not at least familiar with Bank of America's many business lines.
"Brian brings the right combination of knowledge, experience and leadership to achieve all of our company's goals for the future," Chairman Walter Massey, who led the board's search committee, said in a statement.
There was no indication of whether the roles of chairman and CEO will remain split, as they have been for the past eight months or so. Angry shareholders stripped current CEO Ken Lewis of his chairman title and had pushed for his ouster until he announced his retirement on Sept. 30.
Some of those shareholders won't be happy with the choice of Moynihan. They had been pushing for the selection of an external CEO, but while the roster of potential candidates was large and diverse, it appears that relatively few were contacted. Those who did receive feelers were reportedly uninterested due to compensation restrictions and the government's large TARP investment.
When Bank of America paid off its $45 billion last week, the board once again sought out
Bank of New York Mellon
CEO Robert Kelly, who had publicly rebuffed their initial efforts. Kelly shortly decided once again that Bank of New York Mellon is where he belongs, and the board decided to go with Moynihan, rather than another internal candidate, Greg Curl, whom Lewis reportedly favored.
Going forward, Moynihan will have to figure out the best way to get Bank of America moving forward until the stigma of the Merrill Lynch deal -- including the bonuses, the tardy disclosures, and the "exceptional assistance" from TARP -- are just distant memories.
The plan Moynihan sketched out in his statement was vague, mentioning the need to "execute" to get back to Bank of America's heyday of "operational excellence." One hopes and assumes he has more detailed plans to achieve those goals.
Lewis didn't seem entirely convinced that the board had made the right choice. Though he gave Moynihan an otherwise ringing endorsement, he said the new CEO knows the company and can lead it "as well as, if not better than, anyone."
One can only guess, for now, whether that's a reflection of Lewis' own ego or his belief that another candidate was better suited for the huge tasks ahead.
Written by Lauren Tara LaCapra in New York