BofA: Reports of Investment Bank’s Death Are Premature

“I’m Not Dead Yet”

Sure, the Charlotte, N.C., retail banking giant acknowledges that Wall Street sees sweeping changes in its Global Corporate and Investment Bank as a retreat from the business. And yes, Chairman and CEO Ken Lewis said he has had “all the fun” he could stand in investment banking and has been silent in the week since he forced out longtime lieutenant Gene Taylor as head of the unit in the midst of 3,000 job cuts related to the division, which includes bread-and-butter commercial banking functions.

Still, Lewis is expected to reiterate his commitment to corporate and investment banking in remarks Thursday in remarks at the British-American Chamber of Commerce in New York. An excerpt: “We are in the investment banking business for our clients and our shareholders. We started building these capabilities 20 years ago because we believed clients needed us to be able to provide a wide range of products and services as part of a strategic relationship. We still believe that. What is necessary to serve the client is what is going to stay after we do our strategic review. The Bank of America investment banking platform that emerges from this process will be the right platform for our business, the right platform for our clients and one that enables us to deliver the returns that our shareholders expect and deserve.”

The strategic review should be done in six weeks, after which new unit executive Brian Moynihan will implement changesand potentially, more cuts.

Terry Murray, the wheeler-dealer former chairman of FleetBoston Financial Corp., said his protégé Moynihan has his work cut out for him. “Wall Street should be skeptical of everything,” he said. “You’ve got a man at Merrill Lynch going down, Citibank struggling, these gigantic chargeoffs. theyre not in a mood to take anything at face value.”

Still, Murray, who retired before Fleets 2004 merger with BofA, said Moynihan is tireless and talented and will mix things up at the troubled investment bank, just as he did as a rugby player. “I like anyone who’s willing to mix it up,” he said. “It’s football without helmets and that personifies mixing it up.”

For more on the challenges facing Moynihan, read this article in today’s Wall Street Journal.

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