Bank of America hires 2 former Merrill Lynch executives to join global banking operations
It’s a sign of the changing times at Bank of America: Two Merrill Lynch executives who fled the company are back.
Sam Chapin and Todd Kaplan are returning to serve as executive vice chairmen of its global banking operations, Bank of America Corp. said Monday. The two investment bankers were among the many senior Merrill Lynch executives who left after Bank of America agreed to buy Merrill Lynch in September 2008.
Their return is a sign of rebuilding at Bank of America’s investment banking division.
“These guys are coming back because they can,” said Gary Townsend, president of private investment group Hill-Townsend Capital Inc.
They are also rejoining the Charlotte, N.C.-based bank after it repaid a $45 billion government loan — a repayment that relieved Bank of America of restrictions on how much it could pay executives like Chapin and Kaplan.
The pair have a long history with Merrill Lynch, which was purchased by Bank of America in January 2009. Chapin spent 26 years with Merrill, serving as a vice chairman and member of the executive client coverage group from 2003 to 2009.
Kaplan logged 22 years at Merrill, where he was in charge of the global principal investments unit. He most recently served as the investment banking head at Citadel Investment Group.
The two men are returning to a somewhat different company, as the bank has gone through a series of changes over the past year.
The bank faced several regulatory investigations into the Merrill Lynch acquisition, including federal and state demands for information about the billions of dollars in bonuses paid to Merrill Lynch employees just before the deal was sealed.
Bank of America was among hundreds of banks that received government support through the government’s Troubled Asset Relief Program, or TARP. The bank received $25 billion as part of the initial round of investments when the credit crisis peaked in the fall of 2008. It received an additional $20 billion in January 2009, shortly after it acquired Merrill Lynch.
On Monday, a federal judge approved a $150 million settlement between the Securities and Exchange Commission and Bank of America over civil charges accusing the bank of misleading shareholders about the bonuses and billions in losses at the New York-based investment bank.
Ken Lewis stepped down as CEO from Bank of America on Dec. 31, weeks after the bank repaid $45 billion in government loans. Lewis, and Joe Price, who was chief financial officer at the time of the deal and is now head of BofA’s consumer banking division, still both face civil charges from the New York Attorney General’s office regarding the Merrill deal.
Townsend said because Bank of America repaid TARP in a timely manner, the bank did not face any restrictions on bonuses payments paid to its employees. That helps with the employee recruiting, and retention, process.
“Investment banking remains a competitive landscape,” Townsend said, adding that the 2008 bonuses Bank of America paid in 2009 ended up pretty good. “Who knows what 2010 will bring.”
Over the past year, Bank of America has been hiring and rebuilding the investment banking unit.
Bank of America Merrill Lynch now serves as the marketing name for the global banking and global markets operations of Bank of America, which the two executives will be a part of. Chapin and Kaplan will report to Tom Montag, president of Bank of America Merrill Lynch Global Banking and Markets.
Chapin, who will work from New York, and Kaplan, who will be in Chicago, will be responsible for strengthening client relationships.
The appointment of Chapin and Kaplan adds to a flurry of personnel announcements at Bank of America, which tapped Alastair Borthwick and Lisa Carnoy to jointly lead its global capital markets division earlier this month.
Borthwick was formerly head of global investment grade capital markets, a position he held since joining Bank of America in 2005. Carnoy, a 15-year veteran of Bank of America, was most recently head of global equity and equity linked capital markets.
Shares of Bank of America closed up 33 cents, or 2.1 percent, to $16.21 trading Monday.