Bank of America's chief executive, Ken Lewis, has downplayed rumors of possible overseas takeovers, namely recent speculation about a potential acquisition of UK banking group Barclays, highlighting the difficulties involved with such a maneuver.
Cited in Triangle Business Journal, Mr Lewis commented at a Goldman Sachs investor conference in New York: You have heard me talk about the barriers in doing acquisitions in Europe, so I’d have to have a lot of uncertainties cleared up before doing it. I can’t say we’d never do it, but there’d have to be some convincing done before I pulled the trigger.
In addition, Mr Lewis stated that a higher return would be required with such an acquisition compared to a domestic deal because of greater risks, including differences in culture and labor law.
He emphasized the growth potential in the US but asserted that the possibility of making a foreign acquisition has not been completely dismissed.
According to the Financial Times, analysts at Friedman Billings said that an acquisition of Barclays would significantly reduce Bank of America’s (BofA) capital ratios, making a deal highly unlikely.
Instead, BofA’s current strategy to expand international presence will be through building out its capital markets business, a process largely complete in the US. The group plans to invest up to $400 million in the investment banking business in Europe and Asia over the next three to four years, the Financial Times cites Mr Lewis as saying.