BANK of America (BoA) has promoted Brian Moynihan as its new chief executive to be given the task of nursing the stricken lender back to health.
The appointment of Moynihan – who heads the bank’s retail division – follows the retirement of Kenneth Lewis. His promotion comes after the bank posted two quarterly losses in the past year after 20 consecutive profit-making years.
The conglomerate’s board had searched for a chief executive for four months before turning to an insider.
BoA’s search was complicated by Kenneth Feinberg, President Barack Obama’s pay czar who, until the bank repaid its $45bn (£27.5bn) bailout loan last week, restricted the compensation on offer to whoever would take over as chief executive.
Some shareholders who had called for a major shake-up of the troubled lender will be left disappointed by the decision.
Moynihan, 50, had also been criticised by a US congressional committee over his response to a grilling over the bank’s purchase of Merrill Lynch.
US House Rules and Oversight Committee chairman Edolphus Towns claimed the banker “didn’t show the kind of leadership the bank would seem to need.”
The new chief, who will officially take over on 1 January, said he did not envisage any major changes at the bank, but wants to look forward.
Moynihan said: “We need to put the last 18 months behind us. Now is the time to execute.
“This company has a long tradition of operational excellence and strong execution. My goal is to refocus our efforts and attention on those core capabilities that will make us the best financial services firm in the world.”
Moynihan, a former lawyer, joined BoA when the bank took over his employer FleetBoston Financial in 2004. His main rival for the top job at BoA was chief risk officer Greg Curl, who is 61.
A ROCKY RESCUE
15 Sept 2008:
After a frenetic weekend of negotiations BoA agrees to buy Merrill Lynch saving it from collapse in a $50bn (£31bn) takeover. Lehman Brothers files for bankruptcy.
17 Dec 2008:
Ken Lewis tries to pull out of the deal because of rising losses at Merrill. Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke insist it goes ahead.
1 Jan 2009:
BoA officially buys Merrill.
16 Jan 2009:
BoA announces first quarterly loss in 17 years after Merrill lost more than $15bn in the fourth quarter.
29 April 2009:
Lewis stripped of chairmanship. BoA board member Walter Massey is named chairman.
30 Sept 2009:
Lewis announces he will retire as chief executive. The board scrambles to find a successor.
2 DEC 2009:
BoA announces it will repay all of its government loans, which come to a total of $45bn.
17 DEC 2009
Brian Moynihan named chief executive.