CHARLOTTE, N.C. – Bank of America Corp. CEO Kenneth D. Lewis, the takeover king whose purchases in the past four years have more than doubled the bank’s value to $1.46 trillion, yesterday told Bloomberg News he doesn’t need any more big deals.
Instead, Lewis said, he will invest in existing business, increasing U.S. residential and small-business lending and selling more credit cards and corporate bonds abroad. It’s a strategy crafted to soothe the shareholder concerns he believes have prevented Bank of America from surpassing Citigroup Inc. as the world’s top financial institution by market value, the measure Lewis favors.
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Bank of America now has a market value of $241 billion, versus Citigroup’s $266 billion. But Bank of America is trading at about 11 times estimated earnings, while Citigroup is fetching 12. If the gap were closed, they’d be almost neck and neck.
“As we show we can grow organically … we can expand the multiple, and that could eventually cause us to be No. 1,” Lewis said yesterday in an interview at Bank of America’s headquarters. “But until we get rid of this acquisition discount, then we can’t.”