The board of directors of Bank of America is likely to delay a much-anticipated announcement of a replacement for CEO Ken Lewis until next week, an effort people close to the bank say, to conduct a wide-ranging search for the bank's next leader and appease some investors and analysts who want an experienced outsider to replace Lewis.
Lewis announced his intention to step down as CEO of the troubled bank on September 30, and since then the board of Bank of America has been under increasing pressure from analysts to find a highly experienced bank executive as a replacement even as the board signaled its intentions to choose someone inside the company for the post.
People close to Bank of America's board say that the lead internal candidates are chief risk officer Greg Curl and consumer banking head Brian Moynihan. Sallie Krawcheck, the firm brokerage chief, is considered a possible long-shot candidate.
Increasing the likelihood that the bank will select an insider is the dearth of outside candidates who say the want to job. As first reported by CNBC, Barclays Capital chief Bob Diamond took himself out of the running. BlackRock chief Larry Fink has also said he doesn't want the job. (BofA owns 49% of BlackRock through its purchase of Merrill Lynch last year.) And former Merrill Lynch president Greg Fleming is also saying he isn't interested in running BofA.
Meanwhile, the board continues to interview other outsiders or at the very least reach out to them to gauge their interest. People close to the selection say the board wants to show analysts and investors that it has exhausted all possible efforts to consider a worthy outside candidate, before settling back on its initial intention and chose one of the favored insiders. This process will likely delay the announcement to no earlier than the end of this week, and most likely lead the board to make its announcement something next week, these people say.
Lewis announced his resignation amid numerous probes into his decision to buy Merrill Lynch at the height of the financial crisis last year in a deal that was initially valued at $50 billion. The Securities and Exchange Commission, the New York Attorney General's office and a Congressional committee are investigating whether Lewis withheld information about massive losses at Merrill and billions in bonus money paid to its executives prior to a BofA shareholder vote that approved the merger.
After the losses were announced, BofA announced that the federal government needed to bail out the bank with billions in loans and guarantees on its toxic debt. Lewis has denied that he did anything improper and has said he was prodded by former Treasury Secretary Hank Paulson and Fed chairman Ben Bernanke not to evoke the "material adverse change" clause in the merger agreement and to go through with the deal after learning about the Merrill losses.
Regulators feared that by backing out the deal, Merrill would likely become insolvent, much as Lehman had, and further erode market confidence amid last year's meltdown.