) --

Bank of America

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CEO Brian Moynihan's efforts to turn around the troubled institution appear to be sowing confusion among followers of the company.

Fairholme Capital portfolio manager Bruce Berkowitz, who counts Bank of America as his second largest holding, recently compared Bank of America to

Wells Fargo

(BAC) - Get Report

in a note to investors.

"We believe that America's bank is returning to its retail roots (think of Wells Fargo) with a $1 trillion deposit franchise and that bank profits will skyrocket as legacy real estate loans burn-off," Berkowitz wrote.

Rochdale Securities analyst Richard Bove, on the other hand, says Bank of America management has given him the impression they see technology and capital markets as the future of the franchise with retail taking a back seat.

"The future of the company in my view is not retail banking, nor is it lending money to large corporations," Bove said in an interview Thursday. In the same interview, Bove

criticized recent Board nominees who he believes lack experience in those areas.

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"They're closing branches left and right; they're shutting down ATMs; they're dropping market share. If in fact they're going back to their retail roots, they've got a funny way of showing it," he said.

Bank of America closed 57 branches during the second quarter.

A Bank of America spokesman did not respond to a request for comment, and Bank of America's second-quarter conference call offers no definitive statement to refute either Bove or Berkowitz.

On the call, Moynihan made at least two references to spending on technology, saying at one point the investment was "over two or three billion a year this year," and at another point "we invested about $3 billion in technology development this year." On at least two occasions, he singled out progress the company has made in mobile banking for special praise.

Some of that spending on technology, Moynihan said, went to "converting our California franchise. So for the first time in our company's history we now have one deposit platform serving customers coast-to-coast." He added that "we continue to invest in our technology platforms across the world including our cash management platform that serves corporate clients."

As for capital markets, Moynihan's position was difficult to discern.

"When you go to the Markets business, we built the international platform out. We'll always take opportunities to add people where opportunity is, but even on the international we've brought that back a little bit because the fees available and the trading processes available are down," Moynihan told listeners on the call.

As Bank of America tries to take the focus off its legacy real estate exposure and onto future growth, it will need to be clearer about what its priorities are.


Written by Dan Freed in New York


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