Mr Montag, who is the financial institution's highest compensated executive, has been elevated to co-chief operating officer alongside David Darnell, who will oversee the retail banking aspects of the firm's operations, Bloomberg reports.
His new position means he is closer to taking the top role at the firm from current CEO Brian Moynihan, who is under pressure as BofA stock has shed over half of its power since he took the job in January 2010.
At 10:00 local time in New York today (7 September), shares in the bank were priced at $7.29, having risen 4.29 per cent.
"Moynihan knows he's in the line of fire, he'll do everything he can to save the bank - and if for some reason he's gunned down, he knows he has to have an heir apparent," remarked Greg Donaldson, of Donaldson Capital Management.
By Claire Archer