Bank of America CEO Kenneth Lewis has announced he is to retire after months of being dogged by a series of government investigations into the company's acquisition of Merrill Lynch last year.
The reputation of the 62-year-old Mr Lewis had been badly bruised by massive credit losses and the need for two government bailouts. But experts believe it was the intense scrutiny from federal regulators, state attorneys general and the courts that forced his hand.
Shares at the biggest US bank, which have shed 50 per cent since the Merrill Lynch deal was announced on September 15th, 2008, the same day Lehman Brothers declared bankruptcy, were up 2 per cent in after-hours trading.
His retirement by the end of the year - which Mr Lewis characterised as voluntary in a letter to employees - sets up a struggle within the bank's ranks to be his successor, with six possible candidates seen vying for the job, including recently named wealth management chief Sally Krawcheck, consumer banking chief Brian Moynihan and Chief Financial Officer Joe Price.
Known as a dealmaker, Mr Lewis built the largest US retail banking franchise through aggressive acquisitions. Yet his last deal appears to have been his undoing.
In September 2008, the bank announced a $50 billion buyout of Merrill Lynch at the height of the financial crisis. At the time, Mr Lewis and the bank were heralded as saviours of the financial system.
But they began to draw public criticism when questions arose in early 2009 about how the bank publicly disclosed roughly $3 billion in accelerated Merrill Lynch bonus payments and billions in Merrill Lynch losses during fourth quarter 2008 in advance of a shareholder vote on the deal.
Reuters