Updated:

Jan 14, 2019

Original:

Nov 3, 2010

Bank Of America Decides To Sell Majority Of BlackRock Stake Now That It Thinks About Things

Author:

Bank of America was a prettay prettay prettay good time when it was being run by Ken Lewis. The Strawberry Hill Boone's Farm flowed freely and as a result of the boozing, you could buy any company you wanted, whether it was a ticking time bomb or made any sense strategically. It didn't matter! You didn't even have to justify it to anyone because everybody, the CEO most importantly, was there to party. "Who give a crap, just have fun," the motto went. Unfortunately, now that Lewis is gone, God rest is soul, Brian Moynihan is taking a a slightly different, more sober approach to the business.

“It should not surprise anyone, it makes strategic and financial sense,” Chris Kotowski, an analyst with Oppenheimer, told DealBook. “Under McColl and Lewis, Bank of America was an acquisition machine, they bought constantly. What Brian Moynihan is all about is standing back and saying, ‘We’ve got great franchises, let’s catch our breath and rationalize the business.’”

BofA To Sell Most Of Its BlackRock Stake [Dealbook]

Remember Project New BAC, i.e. Bank of America's plan to transform itself from Ken Lewis's house of fun, where everyone went home happy but the concept of making money was less of a focus than keeping the good times coming, to an institution that did things like post profits? The bank has said previously that PNBAC "will result in $8 billion in annual savings by 2015—$5 billion from the first phase and $3 billion from a second phase" and while it stands by those figures and remains committed to cutting as many employees as it takes, some people would like them to be a bit snappier about it. Bank of America is accelerating a broad cost-cutting plan and has set a target of shedding 16,000 jobs by year's end—cuts that would see the company relinquish its title as U.S. banking's largest employer. The proposed year-end total of 260,000 would be the lowest count since 2008 and likely give Bank of America a smaller workforce than JPMorgan Chase, Citigroup, or Wells Fargo...Chief Executive Brian Moynihan is trying to speed the company's transformation into a smaller and more efficient operation as he tries to persuade investors that expenses can be adjusted to compensate for revenue lost to new regulations, an uneven economy and shaky markets. Since becoming CEO in 2010, he has shifted away from a nationwide expansion strategy embraced by his predecessors Hugh L. McColl Jr. and Kenneth D. Lewis, and shed many of the businesses that he considers to be nonessential...Hitting the new staffing target would fulfill a year early Mr. Moynihan's pledge to slash the bank's workforce by approximately 30,000. "If they want to make any headway toward improving profitability," said Sterne Agee & Leach Inc. senior banking analyst Todd Hagerman, "they need to accelerate the timeline." Bank Of America Ramps Up Job Cuts [WSJ]

Just hear them out.

Would've been quite the gag but no, he was serious, in case there was a question in anyone's mind. Wall Street workers got another warning shot across the bow as the nation’s biggest banks gear up to report third-quarter results beginning today. Bank of America chief Brian Moynihan yesterday said that he planned to make good on a springtime plan to cut a whopping 30,000 workers from the sprawling Charlotte, NC-based bank’s work force. “As we continue to get through the mortgage issues at Countrywide, you’ll see the head count come down substantially,” Moynihan told Bloomberg Television. Moynihan has been struggling to put the lumbering bank on a diet and shed nonessential businesses and workers in an effort to reverse the course embarked upon by his predecessor, Ken Lewis. The former CEO hastily gobbled up mortgage giant Countrywide Financial and Merrill Lynch at the height of the financial crisis. In a plan dubbed “New BAC,” Moynihan’s pink-slip program will trim 10 percent from its work force of 275,000. [NYP]

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