For BofA’s Lewis, Investment Banking Is a 4-Letter Word
Posted by Dana Cimilluca
For Ken Lewis, the investment-banking bash of 2007 has definitely come to an end.
Ken Lewis
Here is what Lewis, the CEO of Bank of America, had to say on the company’s conference call to discuss its third-quarter results about an acquisition or joint-venture deal to salvage the dismal performance at its investment-banking unit (where profit fell 93% to $100 million).
“I never say never, but I’ve had all the fun I can stand in investment banking at the moment.”
So much for the hopes of some investors that the company will make an acquisition (of a Bear Stearns, or a Lehman Brothers or UBS’s Wall Street unit) to once and for all get into the top tier of investment banks — and perhaps acquire some adult supervision for its trading operation along the way.
BofA is in an awkward position in investment banking. It still has a middling franchise, behind such puny rivals as Greenhill in the world-wide M&A business, for example (14th vs. 12th this year according to the Thomson Financial league tables). That even though it has spent years and hundreds of millions of dollars trying to build the business into a top-tier performer. To say nothing of the $1 billion tower it is erecting in midtown Manhattan.
Finance chief Joe Price last month said BofA would “continue to deliberately build our platform.” Now even that is in doubt, as layoffs loom large at the bank. For BofA’s investment bankers, the fun may be just beginning.
–With Valerie Bauerlein