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In one of his last speeches as chief executive of Bank of America Corp., Ken Lewis defended his time in the top office, saying history will show that his actions as CEO were profitable in the long run.
“It is easy to let the short-term difficulties obscure one's long-term views,” said Lewis, who is stepping down at the end of the year over criticism of his Merrill Lynch & Co. purchase. “I have always thought that a CEO's job is not only to navigate what shoals immediately stand in the way but also to steadfastly maintain a long term vision for the enterprise.”
Lewis, the CEO since 2001, said he believes his actions “have been true to this principle.”
“I am confident history will show that our actions in operating and building Bank of America positioned our company for future success,” he added. “As I look ahead, I see no reason that Bank of America will not be among the handful of the most important and most successful financial services companies in the world.”
Lewis, speaking at a convention for analysts and investors in New York, did not take questions at the end of his half-hour presentation, with his presenter citing “other commitments.” His remarks about his own tenure came at the end of the presentation; for most of the speech, he stuck to familiar topics such as the bank's diverse business mix. He praised Bank of America's “supermarket” strategy, encompassing investment banking and consumer services, as a way to build economies of scale and survive any type of economy. With the purchases of mortgage lender Countrywide Financial Corp. and investment bank Merrill Lynch, “all the pieces are now in place,” he said.
But Lewis' purchase of Merrill, completed on the first day of the year, is largely what led to his unexpected announcement that he will resign at the end of the year. So he took pains to point out the advantages of the deal, which will help the bank deepen ties with customers as bankers refer them from the investment bank to the consumer bank and vice versa. Lewis said the financial advisers, most of them from legacy Merrill, have made 1,400 referrals to the commercial bank. He also said there are 770 “wealth management banking specialists” deployed to help the Merrill advisers cultivate relationships with consumer banking customers.
The savings from the Merrill deal, which are expected to be about $7 billion, are ahead of schedule, Lewis said: The bank expects to achieve about 45 percent of the savings by the end of the year, compared to previous estimates of 25 percent.
“I still believe today what I said when we announced both of these transactions,” he added. “Despite all the noise, both the Countrywide and Merrill Lynch deals make Bank of America a stronger and more well-rounded company, a much tougher competitor, and I believe will produce good long-term profits for our shareholders.”
Lewis opened his speech with an uncharacteristic joke about his impending exit, remember how his predecessor, Hugh McColl Jr., handed over the responsibility for dealing with analysts to Lewis in 2000.
“Hugh wrote to all the analysts and he said, ‘I've seen you in the good times, I've seen you in the bad times, now I've seen you for the last time,'” Lewis recalled, to laughter from the audience. “Well, it didn't make a very good time for me as chief operating officer as I had to handle that, but in a way, for different reasons, I guess the saying's still the same.”
