Bank of America Corp. chairman and CEO Kenneth Lewis admitted last week that its write-downs for collaterized debt obligations will be bigger than original estimates of $3 billion. This prediction along with the slowdown of the economy has the bank looking for new strategies to limit losses and foster growth. One option BofA may be considering is selling its struggling investment banking business to hedge fund Citadel Investment Group, according to the New York Post.
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Reuters, however, refutes the possibility of a BofA divestiture to Citadel. "There have been no conversations about it and Citadel has not looked at
the books," said a Reuters source. BofA has been the center of deal talk lately. The Charlotte, N.C.-based bank was rumored it was interested in a merger with Citigroup Inc. But most analysts, including The Deal writer Peter Moreira, characterized that possible hookup as "massive but meaningless." — Gerald Magpily
See New York Post article
See Reuters story
See Dealscape: A Citi-BofA merger? Why bother?
