U.S. pressures BofA on board revamp: report

U.S. officials have urged Bank of America Corp to revamp its board and bring in directors with more banking experience, the Wall Street Journal said.

A committee led by Walter Massey, the bank's new chairman, is expected to examine the strength of the board and potential succession for Chief Executive Kenneth Lewis, the paper said in its Friday edition, citing a person familiar with the situation.

Massey was installed after shareholders last month narrowly voted to oust Lewis as chairman of the largest U.S. bank, where he has been chief executive since 2001.

The bank has been criticized for having a dearth of directors with banking experience, and last week said it set up a committee including Massey and four other directors to find new board members to plug that gap.

Regulators last week ordered Bank of America to come up with $33.9 billion of new capital to help withstand a potentially deep recession, after completion of a government stress test.

The shortfall came even after the bank had taken $45 billion of federal bailout funds, including some to help absorb Merrill Lynch & Co, which it bought on Jan 1. Ten of the 19 lenders that underwent stress tests were told to raise a combined $74.6 billion.

It is unusual for the government to be directly involved in bank management when it does not have a direct common stock ownership stake.

Bank of America has also been forced to accept executive pay caps, the Journal said, citing people close to the bank.

Among the executives considered potential successors to Lewis as chief executive are investment bank and wealth management chief Brian Moynihan, mortgage chief Barbara Desoer, and Chief Financial Officer Joe Price.

Lewis has suggested publicly that he might want to retire by 2012, when he turns 65.

Separately, Singapore's Temasek Holdings Pte said it sold its 3 percent stake in Bank of America in the first quarter, taking a loss of around $3 billion in the process, as it refocuses on emerging markets.

The state-owned fund had invested in Merrill and other banks early in the credit crisis, but like many sovereign wealth funds was burned by losses as the crisis deepened.

Merrill common stock investors received Bank of America shares after Merrill was acquired.

A Bank of America spokesman did not immediately respond to a Reuters email seeking comment.

Bank of America shares fell 12 cents to $11.19 in morning trading.

(Reporting by Anurag Kotoky in Bangalore, Saeed Azhar and Kevin Lim in Singapore; Additional reporting by Jonathan Stempel; Editing by Brian Moss)