Surprise as Ken Lewis quits Bank of America

A year after Bank of America's disastrous decision to buy Merrill Lynch, its chief executive Ken Lewis has finally fallen on his sword. Lewis had been under increasing pressure from shareholders who blamed him for the bank's woes after it forked out billions of dollars to take over Merrill Lynch at the height of the banking crisis last year - and ended up being bailed out itself.
 
Investors had called for his head and voted to strip him of the title of chairman at Bank of America's annual meeting in April. Yet his decision to quit now has been greeted with surprise because many Wall Street observers thought he had weathered the storm. He had also stated that he wanted to stay in the job until he was 65, or until the bank had repaid the $45bn in emergency aid it has received.
 
Lewis, 62, was also behind the decision to purchase the troubled mortgage lender Countrywide Financial in January 2008. But it was BoA's $50bn deal to buy Merrill Lynch -  thrashed out by Lewis over a single weekend in September 2008 as Lehman Brothers went to the wall - that was the main target of shareholder venom, mainly because Merrill continued to leach money.

Lewis claimed he was pressured into going through with the deal by Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke. But the excuse did him no good as BoA shares halved in value and the bank was forced to accept bailout funds from the US government.

To make matters worse, the Securities and Exchange Commission and New York's attorney-general, Andrew Cuomo, are investigating whether the bank misled shareholders over the takeover: it later emerged that Merrill distributed $3.6bn in bonuses to employees, despite losing $15bn in three months.
 
Lewis's departure will bring the curtain down on a 40-year career with Bank of America. He joined straight from college in 1969 and took over as its head in 2001. He has claimed that the bank has more talent on its board than ever before - yet no successor has been named. ·