Kenneth Lewis, CEO of Bank of America (NYSE: BAC) said today that the Merrill Lynch deal is ahead of schedule, according to several reports. Lewis said the merger has already created $2.2 billion in cost saving through the end of September.
The comments came while Lewis was speaking to analysts in New York. Lewis said he now expects 45 percent of total anticipated cost savings from the deal to come by the end of 2009. That would top earlier forecasts from the bank of 25 percent of cost savings by year’s end.
The positive news in regard to the merger is basically a first for the deal as the transaction has been under storm since it was approved late last year.
The much debated merger faced several lawsuits, including a complaint by the SEC stating Bank of America told shareholders that Merrill Lynch would not pay out bonuses for year-end 2008 without Bank of America’s approval.
However, Bank of America authorized up to $5.8 billion in bonus money to be paid out by Merrill Lynch, according to the agency. Though Merrill Lynch lost roughly $27 billion in 2008, the firm paid out a total of $3.6 billion in bonuses, with most being right before the Bank of America deal was completed.
On a positive note, the realized cost savings at least help offset the compensation used on the bonuses in question.
Bonuses paid by Merrill Lynch worked out to about 12 percent of the $50 billion Bank of America paid for the firm. According to the SEC, bonuses were paid on December 31 and the acquisition deal closed on January 1.
