Word that top candidates for the chief executive job at Bank of America are discussing breaking the giant bank up has kindled renewed speculation about the fate of Merrill Lynch, which was acquired by the bank in January, creating the world's biggest wealth management firm.

And meanwhile, BoA is to repay $45 billion in US bail-out funds. The bank will use $26.2 billion of its own cash and raise an additional $18.8 billion in the markets beginning today through the sale of stock in the largest ever capital raising by a US bank.

On Wednesday The Wall Street Journal reported that at least two candidates being interviewed for the chief executive job at Bof A have told the board of directors that the  country’s largest bank should consider breaking itself up. The repayment will be the biggest by any of the companies rescued by US authorities during the crisis, and will add to the pressure on other borrowers from the Troubled Asset Relief Programme, including Citigroup and Wells Fargo.

As far as the future of Merrill Lynch is concerned, wealth management industry observers said they were not surprised by the report, and that questions about the long-term marriage between BoA continue to linger.

“The possibility of a breakup is absolutely plausible,” said Gary Carrai, senior managing director for Fortigent, a leading wealth management platform provider.

“Merrill and BoA are two very different firms with dramatically different cultures. That merger took place under unique circumstances. Mergers only make sense where synergies are possible, and a merging for the sake of merging doesn’t make sense.”

“The discussion involving a potential CEO about breaking up the bank shouldn’t be unexpected,” said Alois Pirker, research director for the Boston-based Aite Group.

“The CEO is going to have a big say in what kind firm he wants the bank to be, and he or she has to articulate their vision of the future. It’s very possible a break-up could be in the cards sooner than we thought.”

The issues of cross-selling between the bank’s retail customer and Merrill Lynch advisers will be critical, according to Mr Pirker.

“Whoever takes over has to decide whether retail banking and retail brokerage can generate cross-sales and whether it’s worth have those two very different cultures and business models under one roof,” he said.

“What’s more, Merrill has a big investment banking business that involves a huge risk, and if a new CEO is oriented toward retail banking, he has to decide if he really wants to take that risk,” Mr Pirker said.

In fact, the Journal reported, Michael O’Neill, one potential candidate for the BoA job reportedly told the board that the bank’s risk-adjusted capital wasn’t being used productively and that the bank should become simpler and less prone to volatility.

Mr O’Neil is a Citigroup director and former chief executive of bank of Hawaii. and Barclay’s.

One chief executive of a wealth management firm who asked not to be identified said he was not surprised by the banker’s concerns.

“BofA is a colossal organization with special challenges,” the executive said. “They have tended to marginalize the client experience, and that way of thinking is completely different from the best practices in wealth management and family office firms.”

Merrill Lynch did not respond to a request for comment.