My finance view

John Thain, the Merrill Lynch & Co Inc chief executive who engineered its sale to Bank of America Corp, will head investment banking, securities and wealth management at the new company.

But analysts don’t expect Thain, who has led two major companies, to remain in his new job for long. They look for him to aim for the top spot at Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz) or seek a CEO job elsewhere.

“The fact is that he’s a CEO — he’s not going to stay long,” said Greg Donaldson, director of portfolio strategy at Donaldson Capital Management in Evansville, Indiana. Thain was previously CEO at NYSE Euronext Inc (NYX.N: Quote, Profile, Research, Stock Buzz).

A Merrill (MER.N: Quote, Profile, Research, Stock Buzz) spokeswoman declined comment on the announcement on Thursday. Jim Mahoney, a spokesman for Bank of America, said the bank expects Thain to be a “strong contributor” to the executive management team. “The issue of succession was not central to his conversations with (CEO Ken) Lewis,” he added.

Thain joined Merrill in December after the ouster of Stan O’Neal and was brought in to repair the financial service group after it wrote down $8.4 billion in soured mortgage securities in the third quarter of last year.

Thain has presided over substantial write-downs no fax payday loan. Merrill’s total tally is over $20 billion for this year, including a $5.7 billion write-down in the third quarter that was announced in July. Merrill’s troubles stem from aggressive risk-taking in complex securities during O’Neal’s tenure as CEO.

Many Merrill investors see Thain’s shepherding of the proposed sale to Bank of America as a master stroke that may have saved it from a worse fate. Bank of America had considered acquiring Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz), which later filed for bankruptcy protection.

Thain also avoided being forced to sell the investment bank at a fire-sale price, as happened to Alan Schwartz, who was CEO at Bear Stearns when JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) bought Bear in March. 

Read more