Dick Bove weeps for the loss of Ken Lewis. Emphasis FT Alphaville’s, eyebrow-raising assertions Bove’s:
- Ken Lewis has resigned as the CEO of Bank of America effective December 31, 2009. He made the decision because his ability to manage the company was critically impaired by the “hue and cry” raised against him. Congress, the SEC, a Federal Judge, Attorney Generals from New York and Ohio have launched attacks against him and the company.
- A replacement has not been named as yet but it is expected to come from within the company. Bank of America has a long culture of success and bringing an outsider could harm the morale and performance of the organization. Brian Moynihan is the front runner for the job because he heads the largest division of the company. My personal favorite would be Barbara Desoer. She has a track record of continuous successes in multiple positions at the firm and now leads the mortgage business.
- Ironically, Mr. Lewis may have been driven out of the company due to his successes; not his failures. His acquisitions of Countrywide Financial and Merrill Lynch were strokes of genius that resulted in immediate benefits to the bank. Others complaining about the methodology, not the result, saw the acquisitions differently.
- For those with long memories, one might think back 25 years when the nation’s laws concerning interstate banking were torn down. This created a race among more than 50 banking institutions to become the first national bank in the country since the days of Andrew Jackson.
- North Carolina National Bank (now Bank of America) won this competition beating its competitors handily. It emerged as the nation’s number one depository and the leading bank in every major type of consumer and commercial finance in the country. It soared to the top of Internet banking. It is gathering momentum to be number one in multiple capital market businesses.
- The success of this bank is due to the brilliance of Ken Lewis as a visionary and tactician. He generated the cash flows that allowed his predecessor to make large acquisitions. He maintained the operating disciplines that allowed the bank to dominate in the sale of multiple financial products.
- No other banker in this country can equal his achievements and yet every banker wishes s/he could. Yet despite his successes, he was torn from his post by politicians lacking any of Mr. Lewis’ skills and successes. One can only be amazed that our system of governance can be so flawed.
Related links:
Guess the Ken Lewis beard – FT Alphaville
Ken Lewis’ Farewell Letter – Deal Journal
Clearing out the corner office: American bank bosses – Economist