Today CNBC's Maria Bartiromo interviewed Bank of America's (BAC) CEO Ken Lewis.
See Anchor Women of CNBC for more on Maria Bartiromo.
Below are some key excerpts from this interview.
BofA took $45B of taxpayer TARP money so far.
Fundamentally, they can run the company as they want and managers can and will work for $500,000 a year until they get out of trouble, he is worried 20 to 30 others beyond top management could leave for better salaries elsewhere. Lewis hopes Obama rethinks this restriction on salaries.
On Nationalization: Worry about nationalization has BAC down nearly 90% from the top. Lewis says nobody has said to him that nationalization is the way to go. Nationalization "appears to be vicious rumors." Nobody in government or anywhere has ever talked to him about this as the way to go.
He hopes to make money and pay the taxpayers back in three years.
On Merrill Lynch purchase, he bought when he did rather than wait for it to perhaps go lower as he was worried others might step in and buy it before him.
Kirk Comment: In retrospect, it would have been good to let his competition implode with this toxic time bomb.
On walking away from Merrill Lynch deal when he had the opportunity: At the end of the day, he felt getting out of the ML deal was not in BofA's or the countries best interest. He was pressured by the Treasury, probably Hank Paulson, to go through with the deal because part of what is good for America is good for BofA in the long term.
MB: How does he justify paying out $4B in bonuses to Merrill Lynch.
This was not directly under him and he seemed to hesitate to comment on it saying there is pending litigation. Lewis said he and his direct reports requested they not take their bonuses this year. He said BofA determines 2009 bonuses for 2008 in February so they can see the end result of the past year. It sounds like ML paid their bonuses out just before the terrible results for 2008 were known.
MB: How do you keep good people at the firm.
MB: How do you reassure investors BofA has a plan?
KL: "We are going to get on with doing business." We had a pretty good January in terms of customer flows, refinancing..... trading has been better.... "we had some nice flows in January."
Good flows on debt originations. Refi boom - Countrywide on fire. Refis free up a lot of cash flow for consumers.
MB: When will you be profitable?
KL: We were profitable in 2007 and 2008. Merrill Lynch lost all that money before they were part of BofA. He avoided saying what impact of ML losses will be on 2009 earnings.
We do NOT need more money from the government. Categorically, I can say NO.
MB: What is most important change you can do to succeed in the future?
KL: We are doing it now. We downsized certain areas. We hired 3,000 people in our mortgage group.
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