The bank that's looking for love
Ken Lewis often asks people to list the top four financial services companies in the world by market value from biggest to smallest.
The answer is Citigroup, Bank of America, HSBC and AIG. The question might suggest that Mr Lewis, chief executive of Bank of America, is obsessed with size. But when asked whether he plans to be the largest someday, Mr Lewis demurs. He says market value merely measures progress towards an altogether more ambitious and desirable goal: becoming the world's most admired company.
“We've got scale and size and it makes a difference,” says Mr Lewis, speaking at his headquarters in Charlotte, North Carolina. “But being the most admirable does not require that you be the biggest.”
His statement might disappoint investors who have been wondering ever since he closed the bank's $47bn acquisition of FleetBoston Financial last April what he will do for an encore. But it will please others who were happy with Mr Lewis's pre-merger focus on improved efficiency and customer satisfaction.
Ruchi Madan, banking analyst at Smith Barney, wrote recently that one reason why Bank of America shares “continue to be so cheap” trading at a 20 per cent price-to-earnings discount to the banking sector is that “investors still worry about acquisitions”.
They have cause. Bank of America is the product of four decades of acquisitions. North Carolina National Bank, or NCNB, started the ball rolling, expanding in the southern state in the late 1960s and 1970s. As NationsBank, it started buying up banks in Florida, Texas and elsewhere in the US in the 1980s and 1990s, culminating in the 1998 purchase of California's Bank of America, which created the only bank with a coast-to-coast reach. Then last year, under that moniker and Mr Lewis's leadership, it bought Fleet.
But Mr Lewis, who became chief executive in 2001, says Bank of America can be patient when it comes to making acquisitions. He points out that five years passed between the Bank of America and Fleet acquisitions and that right now he feels no strategic imperative to keep acquiring.
Instead he is once again turning his employees' focus from “episodic events” towards growing profits by satisfying customers so completely that they offer more business to the bank and recommend it to others.
“One of the jobs of a chief executive officer is to see the need for change, articulate that need and then create excitement around that change,” says Mr Lewis.
In the period before Bank of America bought Fleet, it elevated customer metrics to the status of financial metrics and adopted the Six Sigma method a customer-focused, data-driven process used by General Electric and other companies to reduce errors. Bank of America uses it to improve everything from sales to merger integration.
Mr Lewis says the results speak for themselves. Customer approval ratings soared and over a three-year period starting in 2001 the bank added billions to the bottom line through expense savings and revenue enhancements. The work made it possible for Bank of America to buy Fleet, despite a steep asking price.
Bank of America has four large businesses: consumer and small business banking, commercial banking, corporate and investment banking, and wealth and investment management. Mr Lewis would like to expand each of them. He still has the ambition to do so through acquisitions but he says there would have to be an overwhelming financial reason to do so. “There are not any markets we're not in that we think we need to be,” he says, referring to the US. He has looked at opportunities to expand abroad and is often considered a potential suitor of Barclays and other European banks but for the moment he is pleased with the bank's international operations. Bank of America has offices in 35 countries that support clients in 150. For the time being, that may be enough. “As we have looked at opportunities over the years, it's hard to beat the US,” says Mr Lewis. “I like being, for the most part, a bet on America.” That said, he is considering a “strategic investment” in China. But Mr Lewis is not eager to expand his investment bank through acquisitions. One reason: "We don't want that much of the company involved in it." Another: "the arithmetic doesn't work and there would be cultural issues."
"The investment banks are just not appealing to us," he says. "A Lehman Brothers or a Bear Stearns would be too much of the same stuff we're doing on the debt side and others have too big a component of proprietary trading. There is too much risk." Instead, he plans to plough $675m into existing operations, hiring talent and improving technology. What about a brokerage? Bank of America has 2,100 financial advisers. Mr Lewis says he wants closer to 5,000 and is often mentioned as a potential buyer for AG Edwards or Edward Jones and now American Express Financial Advisors, which is being spun off from its parent. But Mr Lewis says the American Express division is too big and as for the others: “To my knowledge, they are not for sale. But even if they were, they are more rural than urban and we're more urban than rural.” Bank of America's investment in its business is part of Mr Lewis's plan to make it more admirable. He tries to keep the target from being “nebulous” by measuring admirability as specifically as he can using metrics related to customers, shareholders and the company's 175,742 staff. For instance, he wants to know if he treats his customers as well as the Ritz-Carlton, the upmarket hotel group, does its guests. To find out, the bank surveys 12,000 customers on a quarterly basis, asking them about how satisfied they are a measurement named “Customer Delight”.
Mr Lewis met or exceeded many specific targets last year. The bank produced record earnings of $14.1bn, and investors expressed their admiration by buying stock: shares rose 21.5 per cent last year, including the payment of dividends. The bank outperformed the Standard & Poor's 500 index, which returned 10.88 per cent. But Bank of America has also suffered blows to its reputation. It is one of several banks being investigated or facing lawsuits because of links with companies such as Enron, Parmalat, Adelphia and WorldCom. And it entered into a $675m settlement with regulators who alleged it had allowed a hedge fund improperly to trade mutual funds.
As a result, Mr Lewis has more closely tied employee pay to compliance and increased accountability. For instance, the bank fired a popular bond analyst in January for illustrating the cover of a research report on the lodging industry with a picture of a man carrying a woman into a hotel room. The problem? Andrew Susser, then head of high-yield research, had superimposed his face on the woman's head. Asked whether he worries about rogue employees exhibiting poor behaviour, Mr Lewis says: “I try not to worry about things that aren't actionable.” But he does worry about the mediocrity that thrives in the bureaucracy of large organisations. Mr Lewis has a few more years to create the world's most admirable company. He must retire in 2009 at the age of 65. He has not yet named an heir apparent, but says he would like to be succeeded by “a strong manager and leader, not necessarily a visionary”.
Until then, he promises to keep pursuing admirability. “If I say anything less than that, we should be accused of being underachievers,” he says.
TOMORROW: Wachovia Bank
打造全球最受敬重的银行
肯?刘易斯(Ken Lewis)经常要人们按市值从大到小的顺序列出全球四大金融服务公司。
回答是花旗集团(Citigroup)、美国银行(Bank of America)、汇丰银行(HSBC)和美国国际集团(AIG)。这个问题或许表明，美国银行首席执行官刘易斯先生沉迷于追求规模。被问及他是否打算让美国银行有一天成为全球最大的金融服务公司时，刘易斯先生否认了这点。他说，市值只是用来衡量达到一个更雄心勃勃、更令人期待的目标的进展，这个目标就是，成为世界上最受敬重的公司。
“我们已经有了一定的规模，那很重要，”刘易斯先生在北卡罗来纳州夏洛特的公司总部发言时说道，“但成为最受敬重的公司，并不需要你是最大的公司。”
自从他去年4月完成470亿美元收购FleetBoston Financial的交易以来，一些投资者就一直想知道，他是否会再来一次收购。他的上述声明可能令这些投资者感到失望，但将取悦另一些投资者，因为对于刘易斯先生在并购前专注于提高效率和客户满意度，后者为此感到高兴。
美邦(Smith Barney)的银行业分析师鲁奇?马丹(Ruchi Madan)最近撰文指出，美国银行的股价之所以“继续以如此低的价格”交易，市盈率比银行板块低20%，原因之一是“投资者依然担心收购”。
他们的担心是有理由的。美国银行是40年收购历程的产物。上世纪60年代末至70年代，北卡罗来纳国民银行(NCNB)启动了这一收购历程，拓展至北卡南部。作为国民银行(NationsBank)，该行在上世纪80年代和90年代开始收购佛罗里达州、得克萨斯州和美国其它地区的银行，而1998年对加州美国银行的收购令这一历程达到顶峰，从而创造了唯一一家业务遍布全美的银行。刘易斯先生于2001年成为美国银行首席执行官，在他的领导下，美国银行于去年收购了Fleet。
但2001年成为公司首席执行官的刘易斯先生表示，就收购而言，美国银行可以保持耐心。他指出，美国银行和Fleet这两项收购之间隔了5年，而目前他感到战略上并不急需继续进行收购。
相反，他再次把员工的工作重心从“偶然事件”转移到提高利润上，方法是让客户完全满意，因而为银行提供更多的业务，并向其他人推荐这家银行。
“首席执行官的工作之一是，看到变革的需要，阐明这种需要，然后激起对这种变革的热情，”刘易斯先生表示。
在美国银行收购Fleet之前的那段时期，该银行把客户衡量指标提升到了财务衡量指标的高度，并采用了六西格玛法(Six Sigma)。六西格玛法是一种以客户为中心、由数据驱动的过程，通用电气(General Electric)和其它公司用这种方法来减少差错。美国银行用此法来改善从销售到合并整合的所有环节。
刘易斯先生说，结果本身说明了一切。客户满意度猛升，从2001年开始的三年间，通过节约开支和增加营收，美国银行的利润增长数十亿美元。这一成就使美国银行收购Fleet成为可能，尽管对方要价奇高。
美国银行有四大块业务：消费者与小企业银行、商业银行、公司和投资银行，以及财富和投资管理。刘易斯先生要拓展这四块业务。虽然他仍有通过收购来拓展业务的雄心，但他表示，必须有充分的经济理由才能那样做。他在谈及美洲市场时表示：“在我们尚未进入的市场中，没有哪个是我们觉得自己必须进入的。”他已在关注海外扩张的机会，而且经常被认为是巴克莱(Barclays)和其它欧洲银行的潜在收购者，但他目前对美国银行的国际业务感到满意。美国银行在35个国家设有办事处，为150个国家的客户提供服务。目前而言，这或许已经足够了。“多年来我们一直在留意机会，但很难找到超过美国市场的机会，”刘易斯先生说，“从很大程度上说，我喜欢在美国下注。”尽管如此，他正考虑在中国开展一项“战略性投资”。但刘易斯先生并不急于通过收购来扩大投资银行业务。原因之一是，“我们并不想让公司那么大一块都介入投资银行业务。”另一个原因是，“加法原理不管用，会出现文化方面的问题。”
“投资银行对我们的吸引力并不大，”他说，“雷曼兄弟(Lehman Brothers)或贝尔斯登(Bear Stearns)在债券方面和我们做的太过雷同，其它公司的自营成分太多。风险太大了。”相反，他计划在公司现有业务中再投资6.75亿美元，用于招募人才、改进技术。收购一家券商如何？美国银行拥有2100名金融顾问。刘易斯先生表示，他想让金融顾问的规模达到近5000人，因而经常有人说，他是AG Edwards 或Edward Jones，以及现在的美国运通财务顾问(American Express Financial Advisors)的潜在收购者。美国运通财务顾问目前正从母公司中分拆出来。但刘易斯先生说，美国运通(American Express)的这个部门太大了，而至于其它部门，“就我所知，它们不准备出售。但即使它们准备出售，它们也是更偏重乡村而不是城市，而我们是城市重于乡村。”美国银行对其业务的投资是刘易斯先生计划的一部分。该计划是让美国银行更加令人敬重。他尽力让目标不“模糊”，因此运用与客户、股东和公司17.5742万名员工相关的评测指标，尽可能具体地衡量公司的可尊重程度。例如他想知道，美国银行对待客户是否像高档酒店集团丽嘉酒店(Ritz-Carlton)对待客人一样好。于是，美国银行每个季度都要调查1.2万名客户，询问他们的满意度如何，这被称为“客户高兴度”衡量法。
刘易斯先生去年达到或超过了很多具体目标。美国银行实现了创纪录的141亿美元盈利，而投资者通过购买该银行的股票表达了敬意：公司股价去年上涨了21.5%，其间公司还支付了股息。公司的表现超过了标准普尔500指数，后者的回报率是10.88%。但美国银行的声誉也遭受了打击。因为和安然(Enron)、帕玛拉特(Parmalat)、Adelphia以及世通公司(WorldCom)有关联，几家银行正受到调查或面临起诉，美国银行也在其中。另外，美国银行还同监管机构达成了赔偿6.75亿美元的和解协议，监管机构称该银行曾允许一家对冲基金不当地进行共同基金交易。
因此，刘易斯先生已将员工薪酬与他们是否遵守规范并提高责任感更紧密地挂钩。例如，银行在1月份解雇了一位著名的债券分析师，原因是该分析师在一份有关酒店业的研究报告封面上，配了一张一个男人抱着一个女人进酒店房间的插图。问题在哪里？时任高收益债券研究负责人安德鲁?苏塞尔(Andrew Susser)把自己的脸放在那个女人的头上。当被问及是否担心流氓雇员表现出不良行径时，刘易斯先生说：“我尽力不去担心那些不会被起诉的事。”但对于在大公司官僚机制中庸才得势的问题，他确实很担心。刘易斯先生还有几年时间去创建全球最受尊敬的公司。到2009年他65岁时，他就必须退休。他尚未指定一位继任者，但他表示，他希望继任者是一名“强有力的管理者和领导者，而未必要是一名有远见的人”。
在退休前，他承诺将继续追求让银行受敬重这一目标。“如果我说任何低于这一目标的话，那么我们将被指责为不求上进者，”他说。
