Report: Bank of America planning to cut 10 percent of branches
CHARLOTTE, N.C. -- Bank of America Corp.'s CEO Ken Lewis said he is planning to shrink the bank's 6,100-branch network by about 10 percent, The Wall Street Journal reported Tuesday.
The newspaper said Lewis told investors of the plans at a meeting last week in Charlotte, N.C., where the bank's headquarters are located. The Journal cited unidentified people familiar with the discussion.
The move would be a pullback from the bank's two-decade expansion, most recently under Lewis' command, which expanded the bank from coast to coast.
A Bank of America spokesman could not be reached for immediate comment.
Shares of Bank of America fell 1.5 percent in premarket trading Tuesday.
The report said it was told Liam McGee, president of Bank of America's consumer and small-business bank, cited changing customer preferences for the move, saying more people are using online and mobile banking.
McGee, however, reportedly said it would be premature to specify how many locations could be closed.
The report comes as Bank of America continues to be under the careful watch of the U.S. government, while it works to integrate two recent deals.
Bank of America acquired troubled mortgage lender Countrywide Financial Corp. last summer and investment bank Merrill Lynch & Co. in January.
Those two acquisitions have proven challenging for Lewis, who was stripped of his chairman title by a shareholder vote at his company's annual meeting in April.
The bank and Lewis have been under intense scrutiny because Bank of America is one of the biggest recipients of government bailout money -- $45 billion -- and because the losses at Merrill Lynch turned out to be much higher than expected. It is not known when it will repay the government.
Over the years, Bank of America has become a financial powerhouse befitting of its name.
First under chief executive Hugh McColl Jr., and since 2001 under Lewis, the bank has grown through acquisition from a little North Carolina National Bank into a behemoth consumer bank.
In 2004, the bank acquired FleetBoston Financial, a move that gave Bank of America $133 billion in deposits in eight Northeastern states. Three years ago it added millions of names to its customer ledger through the purchase of credit card issuer MBNA Corp.
In 2007, the bank completed its purchase of wealth management company U.S. Trust and acquired LaSalle Bank Corp., immediately turning Lewis' bank into the market leader in Chicago.
The acquisition of Countrywide last year brought Bank of America to the forefront of the mortgage business, and the Merrill Lynch deal bought bank a large presence back on Wall Street.