BofA CEO Brian Moynihan Says No More Mergers

by Derek Loosvelt | March 08, 2011

I have to admit I dearly miss the days when ex-BofA CEO Kenny Lewis's tight-lipped, confused frown was plastered all over the webosphere (which is why I've brought it back today). However, it's likely that BofA shareholders do not share my feelings, and today, Lewis's successor, Brian Moynihan, basically told investors that he is doing everything in the exact opposite manner in which Kenny did things.

First off, B Money said (at an investor conferennce) that he is NOT going to indulge in any mergers or acquisitions. He puncuated his feelings on the subject in this manner: "We aren't buying a European bank, I couldn't think of anything less interesting." (If you recall, Kenny's whole strategy was "buy, buy, buy ... buy until you die.")

Second, B Money said (actually, the head of BofA's consumer banking unit, the aptly-named Joe Price, said) that BofA will NOT be expanding its commercial branch reach, but instead will be cutting it back (that is, closing about 10 percent of its 5,900 branches). Management's thinking behind this is "the bank is simply in places it shouldn't be, and has a strong presence where it thinks it should."

Third, B Money says it's all about the dividend: "The bank [is now] focused on returning 'every dollar' in capital to shareholders, through regular dividends, share buybacks and special cash dividends ... in the years 2013 to 2014, and beyond, the bank could be paying out $12 billion in regular dividends and be left with $30 billion more to spend on buybacks and special payouts."

Investors applauded B Money's fighting words. In less than three hours after he spoke, the bank's stock rose 3 percent.

(WSJ)

(Related: Q&A With Bank of America insider)

Filed Under: Finance


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