Bank of America Corp. ousted prominent executives Sallie Krawcheck and Joe Price on Tuesday as part of Chief Executive Brian Moynihan's efforts to reorganize the struggling company.
The largest U.S. bank by assets said on Tuesday evening that David Darnell and Tom Montag would become co-chief operating officers, effective immediately.
The reorganization "aligns the company's operating units with its three core customer groups: individuals, companies, and institutional investors," Bank of America said in a press release. Darnell will oversee the bank's consumer-facing businesses, while Montag will oversee the units that do business with corporate and institutional investor clients.
Krawcheck, who is regularly named as one of the industry's most powerful women executives, ran Bank of America's wealth-management business as president of global wealth and investment management. Price, a onetime CFO of the company, mostly recently ran the company's massive consumer banking operations as president of global consumer and small business banking. Krawcheck and Price were both closely aligned with Moynihan's predecessor as CEO, Ken Lewis.
The management reorganization is Moynihan's latest attempt to address the many problems facing Bank of America, including widespread doubts about its capital levels, the still-unknown cost of resolving its mortgage liabilities, and long-faltering investor confidence. Last month Moynihan resorted to taking a $5 billion infusion from legendary investor Warren Buffett, at terms that were widely considered much more favorable to Buffett than to B of A.
In the latest blow last week, the federal agency that oversees Fannie Mae and Freddie Mac sued Bank of America and several other financial institutions. Due to its acquisitions of Countrywide and Merrill Lynch, B of A's exposure to the lawsuits is particularly large.
--This article first ran on the American Banker website.
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