Bank of America is shrinking
BANK of America plans to shrink its 6,109-branch United States network after years of expansion.
America’s largest bank has denied claims it will shed 10 per cent of its branches – a move that would cost thousands of jobs – but admits there will have to be cuts because more of its customers are using telephone or web banking.
Bank spokesman James Mahoney said the size of the branch network “will come down modestly as we continue to build new branches as well”.
He said there was no pressure from regulators to cut branches.
Mahoney explained that press reports of a 10 per cent cut in branches was the result of misinterpretation of what chief executive Kenneth Lewis said to investors at a meeting.
Mahoney said: “A question was asked: ‘What size do you see the branch network being?’ And Ken said we haven’t decided that. Someone said, ‘Can you envision it being 10 per cent smaller?’ and Ken said, ‘Yes, I can envision that.’”
The North Carolina-based bank faces rising losses from credit card and mortgage loans.
Lewis said on 17 July it will be “much tougher” to make money in the year’s second half, after a $7.47 bn (£4.55bn) first-half profit bolstered by several one-time items.
The chief executive faces intense shareholder anger and regulatory scrutiny following the bank’s acquisitions of Merrill Lynch and mortgage lender Countrywide Financial. There is no timetable to repay its $45bn of federal bailout money.
Lewis, 62, has spent four decades at Bank of America, including eight years as chief executive.
He helped engineer the 1998 merger of NationsBank and BankAmerica.