While Bank of America Corp. (NYSE:BAC) CEO Ken Lewis' job security is up for debate, one bearish banking analyst Meredith Whitney believes the bank should keep the executive despite several missteps that include the acquisition of Merrill Lynch & Co. Whitney told Bloomberg that Lewis "has done a great job."
Whitney isn't alone in her sentiment. Another former bear, Rochdale Research analyst Dick Bove, who when at Ladenburg Thalmann was so bearish on banks he was sued for a report, has changed his tune on BofA, which he initiated with a "buy" rating on Monday.
But insiders such as long time investor Jerry Finger are not happy; some investors are even lining up possible replacements for Lewis, including Barbara Desoer, who is head of BofA's home loan division, and CFO Joe Price, according to a Wall Street Journal report on Wednesday. Additionally, Treasury Secretary Tim Geithner went on the record saying the government may remove bank executives should firms need more bailouts.
Although Lewis is expected to retire in three years, don't be surprised if BofA moves up its timeline if it has some shocking down quarters -- especially if Treasury injects more capital in the firm. Lewis has boldly predicted that the Charlotte, N.C.-based company will come back from a fourth-quarter loss and not need anymore government assistance. But that may be tough for BofA considering Oppeheimer Co. -- Whitney's former place of employment -- points out the bank needs to raise $36.6 billion in equity to align its capital ratios with its peers.
Despite Whitney's and Bove's comments, the time is ticking on Lewis' tenure, but it remains to be seen whether it will be on his terms or not. - Gerald Magpily
See Bloomberg articleSee additional Bloomberg articleSee TheStreet.com articleSee story about Finger's activist campaign from Dow Jones
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