BofA Shuffle May Mean Less Money in Consumer Sector.

LOST IN LAST WEEK'S announcement that Bank of America is promoting marketing chief Cathy Bessant was the fact that the bank is also conducting a major reorganization of its marketing department that may de-emphasize consumer marketing. Lost in last week's announcement that Bank of America is promoting marketing chief Cathy Bessant was the fact that the bank is also conducting a major reorganization of its marketing department that may de-emphasize consumer marketing.

Four divisions which had previously reported to Bessant--who has been named to head the bank's global treasury services division--will be returning to direct corporate control of their business units.

As a result, corporate communications chief Ann Finucane is inheriting a division which is no longer in charge of marketing for global consumer & small business banking, global corporate & investment banking, and global wealth & investment management.

"We have accomplished what we set out to do under Cathy's leadership," said BofA representative Terry Francisco, who said the reorganization had been planned for some time but had been accelerated "to align business marketing teams directly with the lines of business they support."

Even so, the moves were unexpected by some analysts. "I was very surprised," said Richard Bove of investment banking firm Punk, Ziegel in New York. Bove said he believes it signals a decrease in the importance of consumer banking by Charlotte, N.C.-based BofA. "They are clearly not going to be building branches as quickly as they were." However, Francisco countered: "We are not pulling back from consumer banking."

Analysts expect that over the next few years, consumer banking won't be as profitable as it has been recently. Last week, BofA also announced it was pulling its in-store banks out of supermarket chain Publix after 10 years. Overall, the bank has more than 5,800 retail banking offices.

Despite the reorganization, Finucane still will be in charge of a very robust marketing effort.

Last year, Bank of America's spend on measured media totaled $217 million, per TNS. Finucane was head of marketing at Fleet Bank prior to its merger with BofA. She now will be responsible for brand management, advertising and sponsorships, and retain her previous responsibilities as head of corporate communications, government relations and corporate philanthropy.

Shifting control of marketing back to the four business units means BofA's organization will more closely resemble that of rival Citibank, which is known for its highly decentralized marketing efforts, said John Carusone, president of the Bank Analysis Center in Hartford, Conn.

"The closer and more integrated marketing is to its group leader, the more effective it is," he said. "The trick is to strike a balance between efficacy and the expense of redundant efforts."

Bove sees the organizational change as more than just a shift in emphasis for Bank of America. He thinks it also is a huge endorsement of the faith that vice chairman and president of global corporate & investment banking Gene Taylor has in Bessant.

"I was amazed they sent a marketing person to head a division with no consumer inputs," he said.

Global treasury services works with multinationals, other financial institutions and the U.S. Government. Bove said the division may be in trouble and Bessant may have been named its head because of the reputation she earned when she oversaw marketing.

"It's difficult to believe now, but when she took over marketing [in November of 2001], Bank of America was having a real problem with its consumer banking," he said.

Under Bessant, the bank saw significant increases in the number of branches and depositors. While much of that came through acquisitions, during those mergers BofA managed to increase its number of depositors. In banking it is usually considered a major accomplishment to not lose too many customers during a merger.

PHOTO (COLOR): Earning interest: BofA reassigns Cathy Bessant.

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By Constantine Von Hoffman