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US banking chairman is voted out

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silver spoon

Bank of America shareholders have voted to oust Kenneth Lewis as the firm's chairman, following months of criticism over his running of the company. The bank said the result of the vote at its annual general meeting had been narrow, and that Mr Lewis will continue in the chief executive position. However, analysts said it was now the beginning of the end for Mr Lewis, 62. He has been criticised for buying Merrill Lynch last year, and the bank's need to accept emergency state loans. "We knew that it was going to be close, but this is an unambiguous vote of no confidence," said Campbell Harvey, professor of finance at Duke University. "Whether he chooses to remain as chief executive or not, the dominant influence that he had at Bank of America is now a thing of the past." Government aid Bank of America bought Merrill for $29bn (£19.5bn) last September, a move that greatly reduced its cash reserves at a time when it needed them most. As the crisis in the financial sector intensified, Bank of America subsequently needed $25bn in capital injections from the Troubled Assets Relief Programme, known as Tarp, the bail-out fund designed to rescue banks reeling from the financial crisis. At the start of this year it subsequently required a further $20bn. Bank of America made a net profit of $4.2bn in the first three months of 2009, recovering from a loss of $1.7bn in the fourth quarter of last year. However, it said it was increasing its provision for bad losses to $13.4bn, up from $8.5bn in October-December.
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