(Bloomberg) Bank of America Corp. Chief Executive Officer Brian T. Moynihan has summoned more than 100 of his regional leaders to a private meeting today where theyll be pushed to boost the lenders flagging revenue, said two people with direct knowledge of the project.
Managers at the two-day event in Chicago will be judged on how much progress theyve made in helping to sell more products to the 53 million customers of the second-biggest U.S. lender, said the people, who asked for anonymity because Moynihans plan hasnt been made public.
Revenue has dropped every year of Moynihans three-year tenure as he sold assets, repaired the firms balance sheet and settled more than $40 billion in claims tied to defective mortgages. Hes integrating the remaining parts more closely to coax extra business from clients, a tactic known as cross- selling that has worked for Wells Fargo & Co. while falling short at firms such as Citigroup Inc.
Were now at the point with Bank of America when its about boots on the ground rather than the latest lawsuit, said Nancy Bush, an analyst at SNL Financial LC, a bank research firm in Charlottesville, Virginia. In the past, the lender was notably lousy at cross-selling, she said.
The strategy typically could involve asking a depositor to take out a mortgage, add a credit card or sign up with the Merrill Lynch brokerage. Former Citigroup CEO Sanford Sandy Weill used the idea to justify his 1998 creation of the so- called financial supermarket by merging a consumer bank with an insurer, theoretically providing one-stop shopping.
Vikram Pandit, Citigroups CEO until last year, disowned the strategy before his ouster from the New York-based company.
Under Moynihans plan, regional leaders will be graded and ranked on whether they meet targets in about 30 categories of referrals, said the people. One metric could be how many leads commercial bankers are sending to financial advisers, said one person. Referrals reached 1 million last year, said the person.
The regional leaders, called market presidents, previously had a largely ceremonial title as a bank representative for activities including charitable giving in their city or state, according to the people. Most also have full-time jobs in areas including wealth management and corporate banking.
Moynihans push coincides with Bank of Americas new marketing campaign, scheduled to be unveiled this month, which emphasizes the ways customers can be served by deposit, credit- card, mortgage, wealth-management and investment-banking units, said the people.
Were very focused on managing the company to harness the power of every connection we can make for our customers and clients, said Larry DiRita, a spokesman for the Charlotte, North Carolina-based bank.
Cross-selling has had a mixed record in banking, said Charles Peabody, an analyst with Portales Partners LLC in New York. Among U.S. banks, San Francisco-based Wells Fargo does it best, he said. The most valuable lender by market value sells 6 products per retail household, and almost 7 per corporate relationship, the firm said in a presentation. That helped revenue advance 6 percent last year.
Everyone says they can do this, so itll be interesting to see if Brian can pull it off, Peabody said. Bank of America, which set an $8 billion goal for annual cost cuts, must also improve revenue to reach profit targets, he said.
Moynihan was promoted to CEO in late 2009 in part on his plan to shun takeovers and better integrate the $130 billion in businesses bought by his predecessor, Kenneth D. Lewis. Moynihan, 53, made Thomas K. Montag and David Darnell co-chief operating officers in late 2011, charging them with improving cooperation among institutional and retail divisions. They are expected to attend the Chicago meeting, the people said.
Market presidents gathered for the first time in November as the project started, and this weeks meeting will measure progress made since then, said one of the people. The lender has named at least 10 new local leaders in the past year, including Adriana Kong Romero, who covers Tucson, and David Millman, who was is responsible for Maryland.
Bank of America shares rose 4.7 percent this year in New York trading through yesterday, following the 109 percent surge in 2012 as capital levels and the U.S. economy improved. Revenue fell as the company sold businesses and assets worth $60 billion and faced new limits on debit-card fees, sliding 11 percent to $84.2 billion last year and 15 percent to $94.4 billion in 2011.
At Bank of Americas most recent town hall-style meeting in January, an employee asked Darnell, 60, how managers intended to replace the lost money.
As you go from a primary relationship with us, to credit, investments, small business and all the things that we can provide, the revenue multiplier as you go up those stair steps is powerful, Darnell said. Multiply that times the numbers of customers we can apply that to.