It does not say much for the future of plans to rebuild Bank of America (BAC) that major candidates for the CEO position question the board's strategy for running the firm. Many of the bank's board members were brought in by the government, so the Treasury Department's thinking about turning B of A around is being indirectly questioned as well.
The Wall Street Journal has discovered that two of the top candidates to run B of A believe that the firm should be broken into pieces. The paper reports, "The CEO candidates who have questioned the size and scope of the financial empire built by Mr. Lewis and his predecessors include Michael O'Neill, a Citigroup Inc. director and former chief executive of Bank of Hawaii Corp."
The idea of tearing apart B of A makes a certain amount of sense. It has bought businesses as disparate as mortgage lender Countrywide and brokerage firm Merrill Lynch over the last two years, and it is fair to question whether either deal worked well -- especially in the case of Merrill.
Bank of America, like many of the "financial supermarkets" created over the last decade, has personal finance businesses that run from checking to auto and home loans. It also provides loans and other financial services to small and large businesses. It has an investment bank and an institutional money management unit. One argument analysts have made about the largest financial firms is that the value of some of their most important assets is "hidden" by being rolled up in a pool of disparate businesses.
Predictably, many analysts also believe that running a financial firm that is in dozens of businesses in scores of countries around the world is too great a challenge for any executive team. There are simply too many moving parts, and some of them are in risky market segments that require constant monitoring.
The board may not break up Bank of America, which could make the next CEO's job almost impossible.
Douglas A. McIntyre is an editor at 24/7 Wall St.