Bank of America Corp. chief executive Brian Moynihan promised investors he would save $5 billion in costs by 2013, but was otherwise scarce on details during a much-anticipated speech on Monday.
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He did not discuss specific plans for cuts, despite widespread reports last week that Bank of America is mulling laying off up to 40,000 employees.
The B of A chief also did not rule out the idea of throwing Countrywide Financial Corp. into bankruptcy. Writedowns on CFC’s legacy business has resulted in billions of dollars of losses for B of A since it purchased the troubled company in summer of 2008.
The speech was the latest part of Moynihan’s campaign to restructure and restore confidence in the largest U.S. bank by assets.
As reported by National Mortgage News, B of A is in the process of a major rollback of its residential mortgage operations, including the sale of its correspondent lending division.
Mortgage banking sources also believe that in time it will either sell its warehouse finance business (along with the correspondent unit) or severely curtail its lending to nonbanks. Among warehouse lenders, the bank ranks first in commitments.
Over the past year B of A has closed its wholesale mortgage unit and exited the reverse sector. (It also had a large layoff among its mortgage processing staff in the spring.)
“All the businesses we have make money except for mortgages,” Moynihan said during his presentation at a Barclays financial service conference on Monday, adding, “We need to keep working on” the bank’s mortgage operations.
Daily Briefing | Monday, September 12, 2011
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