Friday, March 27, 2009

Ken Lewis: fan of investment bank?

After BoA's IB tanked in Q3, '07 Ken uttered the infamous "I never say never, but I've had all the fun I can stand in investment banking at the moment." Quite a turnaround then...

If I was a shareholder, I would view the IB as a deadweight to the cash cows of the commercial operation. Even if we say "what's done is done", on a going forward basis the outlook is still pretty grim as deals are not happening, very few IPOs coming to market, trading flow is at all time lows and prop trading is a complete ghost town. Lewis gave an implicit backing of the combined IB/CB model with the ML purchase but since then has done a shitty job of communicating his vision for why or his plan for how. Sphere: Related Content
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4 comments:

Thomas said...

I guess Ken watched the MER shareholders sit back while getting run over so he figures the BAC shareholders can't be all that different.

Anonymous said...

You're not going to make me say it again are you?

It's just that there are certain very large banks that never, ever, ever show up on ZH.

saltthefries said...

I think Lewis was after the retail brokerage operations, and swallowed the IB as a bitter pill. If he could dispose of the combined investment banking operations easily, he would. The Merrill Lynch brand's value to Lewis / BAC is in its retail brokerage.

Thomas said...

The Merrill retail model is finished. The vast majority of the "FA's" are flacks pushing high fee, poorly performing "products".