Monday, March 2, 2009

Ken Lewis: We asked for too much money

Look what BAC CEO Ken Lewis had to say today:

Bank of America’s request for $20bn of government money to prop up its acquisition of Merrill Lynch was a “tactical mistake” that made the bank appear as weak as Citigroup, Ken Lewis, BofA’s chief executive told the Financial Times on Monday...

BoA received an initial $25bn from the Treasury in September. It requested a further $20bn at the end of December as the scale of Merrill’s losses eclipsed BofA’s initial forecasts.

“In hindsight, it was a tactical mistake because it put us in the same category as Citigroup,” said Mr Lewis. “We could still have had 8 per cent tier 1 capital after a $15bn loss but we wanted a cushion.”

Mr Lewis said that it would have been better to request only $10bn for that purpose. He said that could have helped to curtail investor fears that further problems were in the offing.

Then give the $10 billion back! How tough is that?

But why would BAC want to do that? After all, didn't their latest filing indicate that they are upside down by $44 billion on mortgages?

NEW YORK (Reuters) – Bank of America Corp is carrying loans on its balance sheet marked at more than $44 billion above their fair value, the company said in its annual report filed with U.S. regulators on Friday.

The bank said it ended 2008 with $886.2 billion in loans, but estimated the fair value -- or market price -- for these loans as $841.6 billion.

Ken said he's going to stay on with BAC until they pay back the TARP money.

Why not?

He bagged shareholders by getting paid $9.9 million for running BAC into the ground!

No comments: