Word: banking
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...financial meltdown has claimed the careers of many banking-industry stars. But no executive has had as big a roller-coaster ride during this crisis as Lewis. At its start, Lewis and Bank of America looked to benefit from the turmoil facing the banking business. The firm, based in Charlotte, N.C., had never been a big player in the subprime-mortgage business, in either lending or underwriting loans. That prudence led to smaller lending losses at B of A than at Citigroup and other rivals. What's more, while other financial firms were verging on broke, Bank of America seemed...
...Army sergeant and a nurse, Lewis grew up in Columbus, Ga. He joined the firm that would become Bank of America right after graduating from George State College in 1969. Early on, Lewis' cool demeanor and keen credit judgment caught the eye of the bank's chief executive, Hugh McColl. Soon Lewis became the wingman to McColl's swashbuckling merger ways. McColl would do the deals, and Lewis would parachute in to do the cost-cutting and integration. Along the way, the two built Bank of America to become the country's largest bank in terms of deposits...
When McColl retired in 2001, Lewis took over. But rather than retrenching as most people expected, Lewis proved he liked the art of the deal as much as McColl. In 2003, Bank of America bought Boston-based bank Fleet for $47 billion. Two years later he spent $35 billion to buy credit card giant MBNA. And as the credit crisis began to unfold, Lewis picked up Countrywide, which at its height was the nation's largest independent mortgage lender, for just over $4 billion...
Since the acquisition, Bank of America's stock has fallen 50% and at one point went as low as $2.53. The problems at Merrill Lynch have turned out to be much bigger than Lewis originally thought. And at times, the Merrill-related losses have raised anxiety about the health of the entire bank. In January the Treasury Department announced it was injecting an additional $20 billion into Bank of America. In all, the government has spent $45 billion trying to stabilize the finances of the bank...
Many analysts believe that the Merrill deal, while risking the solvency of Bank of America, will end up being a boon for the bank. Merrill still has a strong investment-banking franchise, and even in the depth of the financial crisis, its wealth-management business continued to be profitable. Nonetheless, Lewis won't be around to see the fruits of the deal...