By David Mildenberg and Peter Eichenbaum March 2 (Bloomberg) — Bank of America Corp. ’s credit-card unit, which posted a $5.6 billion loss last year, will be combined with the deposits business as chief Ric Struthers leaves the company. Susan Faulkner , 47, takes over the combined unit and reports to Joe Price, head of consumer banking, according to a statement today from Charlotte, North Carolina-based Bank of America. She’s run customer segments, deposits and payments since 2007. Faulkner will have offices in both Charlotte and Wilmington, Delaware, the headquarters of the card business, the bank said. Card issuers struggled with record defaults last year as the U.S. jobless rate topped 10 percent, and Bank of America’s write-offs were the highest among its peers. Chief Executive Officer Brian Moynihan took over Bank of America on Jan. 1 with a vow to improve risk management at the firm, which ranks first in deposits and assets among U.S.-based banks. “We went through the most difficult consumer credit environment we’ve seen in half a century,” Tony Allen, a Bank of America spokesman in Wilmington, said today. “Ric repositioned our business so that we significantly reduced our exposure to credit losses, which peaked in the third quarter.” Card services contributed a quarter of Bank of America’s revenue in 2009, more than any other business. Deposits accounted for 12 percent of revenue and a $2.5 billion profit. The deposits business includes about 6,000 retail banking offices, more than 18,000 ATMs and an online banking service that has about 30 million users. MBNA Takeover Struthers, 54, was the highest-ranking former executive of MNBA Corp. still in a management job at Bank of America, which bought the card company in 2006 for $35 billion. The bank boosted lending to small business customers through credit cards, a move that contributed to defaults as the recession hurt entrepreneurs. Bank of America wrote off $19.2 billion in managed credit- card loans last year, compared with $11.4 billion a year earlier. Write-offs of securitized card loans were 13.25 percent in January, the highest annualized rate among the six biggest U.S. credit-card issuers. The bank hasn’t estimated when it expects its credit-card business to return to profitability, spokesman Robert Stickler said. Bank of America declined 20 cents to $16.51 as of 3:17 p.m. in New York Stock Exchange composite trading . To contact the reporters on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net ; Peter Eichenbaum in New York at peichenbaum@bloomberg.net
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Bank of America Card Unit Merged With Deposit Business as Struthers Leaves
