BofA Hires Jeff Peek, Former CIT Chief, for Investment Bank

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Bank of America Corp. hired Jeffrey Peek, who ran commercial lender CIT Group Inc. for six years, as an executive vice chairman in the global investment bank.

Peek, 68, most recently a vice chairman at Barclays Plc, will focus on financial institution clients when he starts work in New York during the summer, investment banking chief Christian Meissner said in a staff memo. Peek said in an interview that he will start July 6.

Under Peek, CIT expanded into subprime mortgages and student loans, presiding over its collapse and emergence from bankruptcy in December 2009. The next month, Peek left the New York-based lender, which lost at least $5 billion during the financial crisis, and was replaced by former Merrill Lynch Chief Executive Officer John Thain.

Peek spent almost two decades at Merrill, which Charlotte, North Carolina-based Bank of America acquired in 2009. He joined CIT after being denied the top job at Merrill in 2001 and spending 19 months as head of the asset-management unit at Zurich-based Credit Suisse Group AG.

“He’s going back to his roots as a dealmaker at Merrill,” said Brian Charles, an analyst at R.W. Pressprich & Co. “He tried to expand CIT as we were going into a crisis. Some criticized him for expanding too fast, but I don’t fault him for that. It was just bad timing.”

When CIT was cut off from commercial paper, or short-term IOUs, in 2009 it got federal approval to convert to a bank-holding company and received a $2.33 billion U.S. bailout through the Treasury Department’s Troubled Asset Relief Program. CIT went through bankruptcy and didn’t repay the money.

(Updates with analyst comment in fifth paragraph, taxpayer bailout in last.)
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