Brian Moynihan Turned Bank of America Around. Can He Do More? – The New York Times

When Brian T. Moynihan arrived at Davos in the middle of a Swiss snowstorm in January 2010, just weeks after taking on the top job at Bank of America, he didn’t expect to be hit by a blizzard indoors.

But the blast of questions began almost immediately after he sat down to dinner with about 40 business leaders and government officials, including the head of the European Central Bank and France’s finance minister. Many of the guests blamed Wall Street for plunging the world into a financial crisis two years earlier. They wanted explanations.

“It was a pile-on,” said Anne Finucane, a former Bank of America executive who accompanied Mr. Moynihan.

The rookie chief executive, she said, answered the questions in the manner that has since become his trademark: plainly, without fanfare or commentary. Even when he realized that he was the only Wall Street bank boss in attendance, Mr. Moynihan didn’t deflect the criticism. “He just took it,” Ms. Finucane recalled.

Mr. Moynihan’s low-key persona has served him well in the 12 years that he has run Bank of America — a period when Wall Street firms were often vilified for the unfettered greed and excess that led to the 2008 crisis. Despite some initial missteps, he has steered the nation’s second-largest bank from the brink of collapse to record profits.

And unlike many of his counterparts, who are often in the headlines for their views or moves, Mr. Moynihan has pulled it off largely by operating below the radar.

“I just try to get stuff done,” he said in an interview.

The antithesis of the smooth-talking banker, Mr. Moynihan speaks quietly, and mumbles sometimes. A former rugby player who enjoys the novels of John Grisham, he calls employees “teammates.”

At 62, he has no plans to retire.

He took over a bank that taxpayers had bailed out for $45 billion after its ill-fated purchases of Merrill Lynch, the investment-banking giant, and Countrywide, once the nation’s largest mortgage lender. The bank was burdened with tens of billions of dollars in losses tied to Merrill’s bets on subprime mortgages that soured when the housing bubble burst in 2008. Its Main Street business had also faltered during the crash as borrowers struggled to pay back their loans.

It wasn’t clear that Bank of America would survive. And it was even less clear that Mr. Moynihan, a little-known insider who had joined the bank through its acquisition of Fleet in 2004, could turn things around.

For the first few years, public outrage was palpable.

In 2012, protesters interrupted Mr. Moynihan as he spoke at a conference, chanting, “Bust up Bank of America before it busts up America.” That same year, shareholders blasted him at the bank’s annual meeting for its foreclosure practices. Lawmakers grilled him about banker pay.

Even as the bank tried to fix the mortgage debacle — which Mr. Moynihan likened to carrying a 250-pound backpack — there were fresh missteps.

In 2011, backlash to a plan to charge customers a $5 fee to use their debit cards forced the bank to scrap it. Three years later, the bank overstated its capital by $4 billion, an accounting error that prompted the Federal Reserve to temporarily stop Bank of America from buying back shares and raising its dividend. In the postcrisis decade, it paid $76.1 billion in fines — the most of any U.S. lender — according to the House Financial Services Committee.

The bank eventually paid back the government bailout, agreed to a settlement over mortgage abuses and set about cutting costs and repairing its reputation. Today, Bank of America has about 67 million customers, employs more than 208,000 workers and is seen as a bellwether for the U.S. economy. Under Mr. Moynihan’s watch, its stock has more than doubled.

His reputation, too, has climbed. After a gathering during the United Nations climate summit in Glasgow in November, Marc Benioff, the founder of Salesforce, called Mr. Moynihan “the C.E.O. of C.E.O.s.,” who is regularly called upon to give economic advice to world leaders.

The turnaround has surprised doubters who said Mr. Moynihan would not withstand the public outrage, government scrutiny and financial turmoil that once besieged the company.

“I was the harshest critic, saying he should be fired,” said Mike Mayo, a veteran banking industry analyst at Wells Fargo. “The first few years were just ‘Sell, sell, sell, what a terrible bank.’”

In 2015, Mr. Mayo denounced as a mark of poor governance the decision by Bank of America’s board to give Mr. Moynihan the additional job of chairman. Some of the nation’s largest pension funds also fought the move, saying separate chief executive and chairman roles would provide better oversight. Mr. Moynihan won.

Mr. Moynihan’s “disarming, unassuming and at times boring demeanor is an advantage, because his actions speak louder than his words,” Mr. Mayo said in an interview this year. The analyst upgraded his recommendation on the stock in 2016 because it had fallen to a bargain price. Bank of America is now his top pick, largely because of Mr. Moynihan’s efforts to reduce risky lending, resolve lawsuits and slash costs while adding deposits and building the bank’s digital offerings.

Last year, he shuffled the bank’s leadership. Veteran executives retired, including Thomas K. Montag, the chief operating officer, who oversaw the investment-banking division, and Ms. Finucane, a key ally. One of Wall Street’s most powerful women, she is now chair of the bank’s European board. Rising managers, such as the finance chief, Alastair Borthwick, will probably need years of training before they are ready to take over the reins. Mr. Moynihan, therefore, could run the bank for many more years.

“We have a guy we’re happy with,” said Lionel L. Nowell III, Bank of America’s lead independent director. “But we also understand that there’s life beyond Brian,” and will plan accordingly, he said. Mr. Moynihan telegraphed and meticulously planned the changes and will help prepare the next generation, Mr. Nowell added.

Another longtime member of the board, Monica C. Lozano, said it was “enormously satisfied” with Mr. Moynihan’s leadership.

Mr. Moynihan’s long tenure is not uncommon on Wall Street, partly because bank boards have valued stability atop their large, complex operations after the financial crisis. Mr. Moynihan started the same year as Morgan Stanley’s chief, James Gorman, who is preparing two potential successors. Jamie Dimon has been at the helm of JPMorgan Chase for 16 years. Last year, he got a special stock grant that could be worth $50 million if he stays through 2026, according to The Wall Street Journal.

Mr. Moynihan was born in Marietta, Ohio, one of eight children in an Irish-Catholic family. His father was a chemist for DuPont, and his mother sold insurance.

Money was tight, so Mr. Moynihan worked odd jobs. He attended Brown University, from which he graduated in 1981. As a student, he delivered newspapers to hundreds of classmates before 7 a.m., hauling sacks of papers through the dorms and collecting nickels and dimes. He shoveled snow during the blizzard of 1978 and worked as a laborer at a flooring company in Providence, R.I., to earn extra money.

Mr. Moynihan was “a guy you could completely count on,” said John LeClaire, who played rugby and shoveled snow with him at Brown. He would “never quit,” said Mr. LeClaire, a partner at the Goodwin Procter law firm in Boston, the city where Mr. Moynihan is also based. Both men would go on to marry their college girlfriends. When Mr. Moynihan turned 60 in 2019, the two friends celebrated by playing a different sport — curling.

He got a law degree from the University of Notre Dame and worked at Edwards & Angell, a corporate law firm, before joining Fleet bank in Boston in 1993. After Bank of America acquired Fleet, he became a key adviser to his immediate predecessor, Ken Lewis, during the 2008 crisis and served as general counsel.

One of Mr. Moynihan’s most important early backers was Warren E. Buffett, who invested $5 billion in the bank in 2011, betting that the chief executive could turn the company around.

“I wasn’t wrong on Brian,” Mr. Buffett said. In his estimation, Mr. Moynihan had the soundness of character and judgment to avoid the “dumb things” — like excessive risk-taking — that other bankers might do. “There have been a lot of financial cowboys in banking,” Mr. Buffett said.

While Mr. Moynihan’s prudence appeals to investors, it has frustrated some investment bankers who lost out on deals because of the bank’s strict terms for loans and transactions, said two former executives, who requested anonymity to discuss their former employer.

Bank of America clamped down on risk in 2017 after taking a $292 million charge on a soured loan to Christo Wiese, then chairman of Steinhoff International, a troubled South African retailer. For the last five years, the bank has ranked third or fourth in global investment-banking revenue, according to Dealogic data. Some observers say the play-it-safe approach has led to stagnation, although the investment bank brought in record fees last year.

“He’s far too cautious — he doesn’t know how to identify and seize opportunities,” said Christopher Whalen, chairman of Whalen Global Advisors, a consultant in New York, adding that Bank of America has forgone potential profits in mortgage lending, trading and wealth management.

Mr. Nowell, the bank director, said the company had boosted earnings while taking a disciplined approach.

At the same time, Mr. Whalen said, the bank has adeptly pre-empted criticism by promoting its environmental and social bona fides. One of the worst offenders when it came to foreclosures during the financial crisis, the bank later pledged $15 billion toward affordable homeownership by 2025. Last year, it announced plans to lift hourly pay for workers to $25 by 2025, just days before bank chiefs were scheduled to testify on their practices in front of lawmakers. And when George Floyd was murdered in 2020, the bank pledged $1 billion to address racial inequality.

“It’s mostly set up for damage control,” Mr. Whalen said. “They do the dance, and they deliberately try and be seen as sensitive and caring. All the big banks coming out of the crisis have tried to do that.”

Mr. Moynihan’s moves have surprised many observers.

Henry M. Paulson Jr., the former Treasury secretary and chief of Goldman Sachs, said he had been skeptical that Mr. Moynihan could make the switch from general counsel to chief executive. “He was the one that was most underestimated, and guess what: He proved everyone wrong,” Mr. Paulson said.

When Mr. Moynihan announced the management changes in September, industry observers compared them to the ending of “The Godfather,” in which the soft-spoken Michael Corleone suddenly gets rid of his competition.

Asked about the comparison, Mr. Moynihan said he hadn’t seen the classic 1972 film.

He then added: “There’s no power to consolidate — I was the C.E.O. before, and I’m C.E.O. now.”