Bank of America's Acquisition of Countrywide Mortgage

I was not surprised to read this morning that Bank of America (Bofa) agreed to purchase the distressed lender Countrywide. This will make Bofa the largest lending institution in the country. I think that Kenneth Lewis, CEO of Bofa has made yet another brilliant move in engineering the growth of an empire that started as a regional bank. When the market rebounds, (and it will) this will prove to be instrumental in helping to grow Bofa beyond the megalithic retail banking institution into a more full service organization.

I am sure there are men smarter than me working on their expansion plans, but let the Citigroup debacle serve as warning. Bank of America must be careful not to over-extend themselves, as in their promotion of their private banking business. Citigroup managed to tarnish the Salomon Smith Barney brand due to their disconnect with the core constituencies using their services. I liken these conglomerates to the Spanish Armada under Ferndinand and Isabella and the more agile companies who have market share in these various sectors to Sir Francis Drake’s Sea Dogs of Britain’s Navy.
I would love to know what everyone’s thoughts are on this.

Cheers,
Ben