Shocker: Two Top BofA Executives Get Along Just Fine
Despite tensions among rival executives at Bank of America, two of the bank’s top leaders have formed an unlikely friendship.
Wealth management chief Sallie Krawcheck and Tom Montag, the head of Bank of America’s highly profitable global banking and markets unit, have formed a tight bond inside a bank driven with nasty rivalries.
“They’re like brother and sister,” a person close to the executives said.
Both Montag and Krawcheck run parts of the company that are well-regarded and profitable. Both are thought to be candidates to succeed Brian Moynihan as CEO someday (which may explain why some rival executives have it out for her).
Both came to Bank of America from the outside—Krawcheck had most recently been Citigroup’s CFO and head of wealth management while Montag had been a star trader at Goldman Sachs.
Krawcheck and Montag formed something of an alliance over their mutual interests in keeping Bank of America's upper management from interfering too much in the operations of their units, both of which are largely made up of Merrill Lynch operations.
And they’ve had some success on that front. Moynihan is said to be much more willing than his predecessor, Ken Lewis, to empower the executives who report to him.
“Under Ken there was the feeling that the Merrill culture was going to be crushed. Now people are feeling a little less worried,” one long time Merrill veteran said.
The rise of this friendship is somewhat surprising because the two executives lead very different businesses inside of Bank of America.
Montag is said by some inside the company to have a vision for his unit to operate more like Goldman Sachs , which famously earns an overwhelming share of its profits from trading. Last quarter, profits from bond and stock trading by Montag’s unit were great enough to offset losses in most of Bank of America’s other businesses.
This Goldman-like trading focus can conflict with the priorities of Krawcheck, who has a well-deserved reputation for protecting brokerage customer’s interests.
As is often the case on Wall Street, some of the traders pulling in huge profits at Bank of America view Krawcheck’s “focus on the clients” as a distraction, a person familiar with the situation said.
As we’ve seen with countless other Wall Street firms, the take-no-prisoners culture of traders often comes to dominate the rest of the company. So Krawcheck must work hard to conserve the brokerage's culture. (Note: just like Goldman, Bank of America insists its trading business is client focused.)
For now, however, Krawcheck’s brokers and Montag’s traders seem to be comfortable inside the same firm.
“Sallie and Tom are trying to avoid the stereotypical Wall Street clash between traders, bankers, and brokers,” the Merrill employee said.
More from John Carney:
- BofA's Krawcheck in Crosshairs ... Again
- Private Equity Firms Escape Financial Reforms
- Hedge Fund Managers: Drowning in 'Liquidity'
- Merrill Brokers Chafe at BofA Over 'Principles'