Bank of America to close some branches
NEW YORK (Reuters) - Bank of America Corp said it plans to shrink its 6,109-branch U.S. network modestly over the next three to five years, an about-face for the nation's largest bank by assets after years of expansion.
A bank spokesman, James Mahoney, rejected a published report that the bank plans to shed 10 percent of its branches, a move that would cost thousands of jobs. But he said cuts would come as more consumers bank online or by phone.
Bank of America has branches in 32 U.S. states and Washington, D.C.
The Charlotte, North Carolina-based bank faces rising losses from credit card and mortgage loans. Chief Executive Kenneth Lewis on July 17 said it will be "much tougher" to make money in the year's second half, after a $7.47 billion first-half profit bolstered by several one-time items.
Lewis faces intense shareholder anger and regulatory scrutiny following the bank's acquisitions of Merrill Lynch & Co and mortgage lender Countrywide Financial Corp. There is no timetable to repay its $45 billion of federal bailout money.
"It's not unreasonable to suggest that their branch network might shrink a little bit as they try to pull out all the efficiencies that they can," said Jaime Peters, an analyst at Morningstar Inc in Chicago.
Earlier Tuesday, The Wall Street Journal, citing people familiar with the matter, said Lewis told investors at a meeting last Thursday that he plans to close 10 percent of the bank's branches. Mahoney said that is not the case.
"We do not have a plan to reduce branches by 10 percent," Mahoney said. "A question was asked: 'What size do you see the branch network being?' And Ken said we haven't decided that. Someone said, 'Can you envision it being 10 percent smaller?' and Ken said, yes, I can envision that."
Over three to five years, Mahoney said, the size of the branch network "will come down modestly as we continue to build new branches as well." He said there was no pressure from regulators to cut branches.
Lewis, 62, has spent four decades at Bank of America, including eight years as chief executive.
He helped engineer the 1998 merger of NationsBank and BankAmerica that created Bank of America, and also oversaw the acquisitions in 2004 of FleetBoston Financial Corp and in 2007 of LaSalle Bank Corp.
Among large U.S. banks, only Wells Fargo & Co has more branches, with 6,668 in 39 states and Washington, D.C., following its December acquisition of Wachovia Corp.
JPMorgan Chase & Co has the third-largest network, with 5,203 branches in 23 states after in September buying the banking units of the failed Washington Mutual Inc.
(Reporting by Jonathan Stempel; Additional reporting by Elinor Comlay; editing by Gerald E. McCormick and John Wallace)
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