After much soul searching and consumption of Skittles over the weekend, I’ve decided to formally throw my hat in the ring for the position of Bank of America CEO.
Frankly, folks, this is the easiest job in finance right now – akin to taking over an NFL franchise the year after it goes 0 and 16. Regardless of what you do, it would be hard to NOT make an improvement.
Below is TRB’s Nine Point Plan for Fixing Bank of America. B of A board members who are feelin’ me can holla by phone or hit me on LinkedIn to set up a meeting…
1. No More Bank of Amerillwide: The bankers become B of A, the investment people become Merrill Lynch. Period. No more muddling of the brands, you have a bank and a brokerage, keep them distinct. Citigroup already proved that the “supermarket” concept for financial services is a failure 10 years ago. Oh, and the janitorial staff will henceforth be known as Countrywide.
2. Ken Lewis banished from the company in any capacity. He’s accomplished great things for the firm in the past (pre-2007), but his continued involvement at this point prevents any kind of forward momentum.
3. Corporate HQ moved from Charlotte. Not to NYC but to Washington DC, ya know, to be closer to the shareholders.
4. Investment banking activity at B of A must cease immediately. Guys, you’re not good at it and cannot compete, you’re just paying people to stay in the game. All worthwhile banking deals and employees become Merrill. Put the Goldman Envy up in the attic along with the old Fleet paraphernalia, the Avril Lavigne CDs and the rubber Livestrong bracelets. The aught’s decade is over, the moment has passed.
5. 12 month moratorium on new branches/ ATM alcoves. Only open a new location if you can shut down or sell off an unproductive one.
6. Pay back TARP. By Any Means Necessary. A timetable must be established and executed upon regardless of the “uncertainty”. This was the smartest thing Goldman and Morgan did. It closed the chapter.
7. Cut Bank of America sell-side research, brokerage operations, and retail advisor sales force. Raise payouts for top advisors, move them over to Merrill where they belong.
8. Announce joint venture with Small Business Association. While trillions in bailouts have been shoveled into the big bank furnace, the small businessman has not only been ignored, he is now being informed that taxes, healthcare costs etc. are headed higher next year. B of A could be a hero in this arena and pick up plenty of new business accounts by offering a program to the most important people in our country, the business owners.
9. Freeze all credit card APR hikes until TARP has been paid off. The fact that a bank that’s borrowing at zero percent from the government for almost a year can’t make money with credit cards at a reasonable interest rate (mid-teens let’s say) is a farce. Show America that you actually deserve to be the “Bank Of” and build back some goodwill. Right now, everyone hates you and jacking up credit card rates will only make things worse.
So these are the broad strokes of my plan to fix Bank of America. And no, I won’t say that the road ahead will be difficult, I’ll say the opposite – the road ahead is a cakewalk if I am appointed as your new CEO. There are enough smart and talented people at B of A/ Merrill Lynch to turn this thing, so getting the strategy right at the top is all that matters.
Half of your competitors for each line of business have disappeared, literally. Bernanke is keeping the punch bowl available and spiked with 151 proof rum. Your cost of borrowing is effectively zero for the foreseeable future. Forget the investment banking fantasies and global franchise pipe dreams.
Just get out there are be a damn bank, would you please? The environment has never been better to do so.