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Bank of America : company profile

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Bank of America has become one of the biggest financial institutions in the US as a result of a string of acquisitions which turned what was originally a small regional player into a national giant. It is arguably the country's leading retail bank, the #1 in consumer deposits, and one of the top two in credit card lending and small business banking. However several of its acquisitions during the 2000s also loaded the business with significant problems. These caused it to lose its position as the overall #1 US bank in 2011 to more stable rival JP Morgan Chase. The two most significant purchases were bolted on in 2008 as the economy slid from bad to worse. The group stepped in to acquire struggling mortgage lender Countrywide Financial, becoming America's #1 in that sector, but also the overseer of thousands of toxic home loans which should never have been issued in the first place. Then, in its boldest deal to-date, it agreed to rescue ailing investment giant Merrill Lynch for $50bn in stock. That controversial merger, completed at the very beginning of 2009, established BofA as the undisputed leader in retail brokerage and wealth management. Yet it also generated a public dispute over the quality of its due diligence when the bank was forced to make substantial additional writedowns in connection with Merrill's soaring liabilities. It took almost another four years for BofA to regain its pre-2008 stability.

Advertising

Who handles advertising? Click here for these and other Agency Account Assignments. Bank of America declared marketing expenses of $1.75bn in 2017. In the US, Kantar (in Advertising Age) reported measured expenditure of $229m for 2016, out of an estimated total of $1.47bn, of which $144m was spent on the Bank of America brand and $37m on Merrill Lynch.

Competitors

See Financial Services Sector for other companies

Brand & Activities

While several of its competitors struggled in the early 2000s to make sense of their size and global spread, Bank of America - often known by the acronym BofA - steamed forward with a series of what were mostly smart acquisitions and a clear focus on nuts-and-bolts banking. Rather than go for gold in the more glamorous sector of investment banking, for many years the group focused its main attention on the core business of US retail financial services. Describing itself as the Bank of Opportunity in its marketing, it certainly took every opportunity itself to snap up key strategic purchases to strengthen that domestic offering. It became the clear #1 in consumer and small business banking in the early 2000s, and towards the end of 2007 overtook Citigroup to become the #1 by market capitalisation as well. It built a leadership position in two new areas in 2008 following the deals to acquire Countrywide and Merrill Lynch. However, the burden of its numerous acquisitions, and especially the weight of bad debt inherited with Countrywide, plagued the company for years, long after other lenders had regained stability. As a result, BofA slipped back behind JP Morgan Chase in 2011 by both revenues and total assets.

Following further restructuring during 2012, Bank of America now reports across five different divisions. Retail banking and card services are consolidated as consumer & small business banking; mortgage lending reports separately, as do investment banking, commercial banking and wealth management.

Consumer Banking

The main consumer & business banking division provides general financial services to around 47m consumer and small business customers. Its offering includes the usual assortment of checking and savings accounts, small business payroll services, home equity lending and mortgages, but BofA has introduced a flood of different branded packages designed to make these mundane services as convenient and hassle-free as possible. The bank has for many years considered customer service to be one of its most important functions. Banking staff are encouraged to use customer names frequently and smile constantly. Most branch offices employ a greeter who welcomes customers through the door and, borrowing a term from Walt Disney, the bank sometimes refers to its lobbies and other public areas as "onstage".

BofA also steadily pieced together what is now one of the biggest retail banking networks in the US, now with 4,580 branch offices spread across the country (as of Dec 2016). This was reinforced by key purchases such as FleetBoston Financial Corporation and LaSalle Bank of Chicago. As a result of such deals, BofA ended up with five times more US outlets than Citi and also retains a lead over the expanded JPMorgan Chase. In addition, while both those competitors' networks tend to be concentrated in the more affluent Northeast, with a much thinner presence elsewhere, BofA was the first bank to establish what could be called a truly national presence, even if the network only covers 33 states. The group still has only a limited presence in some of the less populous central states of the Midwest and Southwest such as Utah, Montana, Colorado and the Dakotas, although it has representation here through an extensive network of almost 16,000 branded ATMs. However, it was overtaken as the country's biggest bank by retail outlets in 2009 by the merger of Wells Fargo and Wachovia, which created a combined network of over 10,700 "stores" in 39 states. BofA also offers a substantial telephone banking service, and is America's foremost internet bank, with almost 34m active online customers, and 21.6m mobile banking accounts.

Although the original Bank of America effectively introduced the very first credit card in 1958, its lead was quickly stolen by Citigroup and others in the 1980s. The acquisition of MBNA in 2006 for $34.6bn re-established BofA as the country's biggest issuer of consumer credit and debit cards, and almost tripled the group's income from that segment. However consolidation within the rest of the banking sector pushed BofA back into the #2 spot in 2008, behind JPMorganChase. MBNA also gave the group a significant presence in the UK, where MBNA was already established as a leading card lender, as well as in Ireland, Spain and Canada.

In addition to its main branded credit and debit service BofA is the leading company in co-branded affinity cards. In the US, it operates cards on behalf of partners including the AAA, Alaska Airlines, National Education Association, Upromise, National Football League, Major League Baseball and many others. It is the #2 card issuer in the US behind JP Morgan Chase, with receivables of $100m in the US. However, the group's continuing financial worries prompted a downsizing in its credit card business during 2011. The Canadian operations were sold in summer 2011 to Toronto-Dominion Bank for $8.5bn and a buyer was also sought for the European business.

At the end of 2016, the group agreed to sell the biggest of MBNA's international divisions, in the UK, to Lloyds for £1.9bn. In Europe it has affinity partnerships with more than 18 British leading football clubs including Chelsea, Liverpool, Manchester United, Celtic, Rangers and the England team as well as charities such as the British Heart Foundation, RSPCA and National Trust, marketers such as Sony, BT, Virgin Atlantic and BMI airlines, and retailers Amazon.co.uk and Play.com.

Combined revenues from consumer banking rose 9% in 2017 to $34.52bn, and net income jumped 14% to $8.21bn. More than half the division's revenues and three-quarters of profits came from card services.

Legacy Assets & Servicing

The division previously known as Consumer Real Estate Services adopted this vague title in 2015 in an attempt to play down the multiple problems which had plagued it. The acquisition of struggling US mortgage lender Countrywide Financial was intended to be a masterstroke deal, one that catapulted BofA's own First Mortgage unit from the #5 position among US mortgage servicers to the #1 spot. Countrywide was already the country's biggest mortgage lender in the US with more than 1,000 branch offices. However the business has been devastated by losses relating to the collapse of the US subprime sector, mainly because of lax lending standards which resulted in skyrocketing debt delinquencies, resulting in substantial losses for 2007. It was bailed out half way through that year with a $2bn capital investment from Bank of America, but plans to set up a joint venture to market loan products later morphed into a full takeover. The deal closed towards the end of 2008, although the date was postponed by a number of problems, not least a series of lawsuits brought against Countrywide alleging deceptive and discriminatory trade practices. The Countrywide brandname was phased out during 2009, with the mortgage division rebranding as Bank of America Home Loans. Bank of America also enlarged its mortgage business in 2007 with the purchase of Seattle Reverse Mortgages, a company which offers specialised financial solutions for seniors.

By the end of 2009, BofA was America's #1 mortgage provider, managing 14.1m mortgages with a combined servicing value of $2,150bn. Attempts to reduce the number of disastrously ill-judged loans on its books led to thousands of foreclosures, which in turn saddled the company with an appalling public image, as well as tens of billions of dollars in potential damages from lawsuits brought by aggrieved former customers. For 2011, valuation writebacks and provisions against litigation caused what is now the bank's Consumer Real Estate Services division to report negative revenues of of $3.2bn and a net loss of $19.5bn. During 2012, BofA during 2012 to pay $11.8bn to settle lawsuits relating to foreclosures, and another $11.4bn in compensation at the beginning of 2013 to mortgage finance firm Fannie Mae, which was itself nearly bankrupted by mortgages sold to it by BofA and other lenders. In 2013, it slipped to the #3 in mortgages behind Wells Fargo and JP Morgan Chase.

In an attempt to draw a line under its multiple mortgage-related legal disputes, the bank agreed what are expected to be the last major settlements in summer 2014, paying the Federal Housing Finance Agency around $6bn and the Justice Department a record $16.65bn. Those payments brought the total cost of real estate losses, legal fees and settlements resulting from the Countrywide acquisition to around $75bn. Revenues for the LAS division were $3.43bn, but it reported yet another net loss totalling $740m, though that was significantly less than the $13.1bn deficit the previous year, resulting from litigation expenses and settlements. The mortgage servicing portfolio has fallen back by almost 75% since 2009 to $565bn at the end of 2015.

Global Wealth & Investment Management

Several other divisions are involved in investment banking, commercial banking and wealth management. This side of the business was transformed by the absorption of Merrill Lynch. That deal was agreed in September 2008 for around $50bn in stock, and completed on the first day of 2009. Virtually overnight Bank of America became the world's largest retail brokerage, merging its existing wealth management business with that of Merrill Lynch. (The long-term investments business of BofA's existing asset management subsidiary Columbia Management was sold to Ameriprise in 2009). In the short-term, however, the Merrill acquisition led to huge additional writedowns in profits and asset values. BofA was also obliged to accept additional emergency funding from the US government in order to get the deal closed. That brought the total received by the bank under the Tarp bailout to $45bn. (As a result of an improvement in performance during 2009, and a large cash call to shareholders, the group had paid back all of that $45bn bailout by early 2010).

An additional distraction in the first half of 2009 was a row over whether senior officers at BofA and Merrill Lynch has misled shareholders over the health of the latter's finances at the time of the merger. Both banks' reputations were damaged when it transpired that billions of dollars of bonuses had been rushed through early at Merrill Lynch, possibly with BofA's knowledge, so as to be paid before publication of huge losses. Most recipients of those bonuses were persuaded by the weight of public opinion, reinforced by newly elected President Obama's disapproval, to return part or all of their payouts. (BofA later paid $33m to settle regulators' claims that it had misled its shareholders over the deal, followed by a $2.4bn settlement with the shareholders themselves in 2012).

There are two principal arms to what is now known as Bank of America Merrill Lynch. The Global Markets & Investment Banking division provides equity and debt trading, capital markets services, investment banking and strategic merger and acquisition services through a network of subsidiaries, including Merrill Lynch Pierce Fenner & Smith, Merrill Lynch International and other companies. Its clients are generally institutional or corporate investors. It is among the top three in the US for investment banking revenues, announced M&A, equity and debt capital markets. Merrill Lynch Global Wealth Management offers products and services for individuals and small or mid-sized corporations and institutions. Until recently, that was managed via an unrivalled network of around 15,000 financial advisors in 750 offices around the globe. However, the group agreed in 2012 to sell its wealth management operations outside the US and Japan to Swiss private bank Julius Baer for around $880m. There are now around 6,200 financial advisors within the group. Merrill offers its services in the US under the Merrill Edge banner. The main Merrill Lynch Wealth Management division caters to clients with assets of $250,000 or over, while a separate Private Wealth Management unit operating under the name of US Trust (acquired by Bank of America in 2007) handles clients with assets of $3m or more.

Global Wealth & Investment Management unit generated revenues of $18.59bn in 2017 and net income of $3.09bn.

Although it has fixed its primary focus on consumer and small business banking, BofA also runs a substantial commercial banking business, and this too was strengthened considerably by the addition of Merrill Lynch. The merged unit now trades under the Bank of America Merrill Lynch name, and offers financial solutions for larger corporate and institutional customers, including lending, capital and advisory services and treasury services. It is the #2 in corporate debt, in leveraged loans and in asset-backed securities, and #2 overall by investment banking revenues. It has a growing share of areas such as M&A or IPOs, primarily in the US, but still ranks well behind the other big American banks. The group provides commercial lease finance through several subsidiaries including Banc of America Leasing and Dealer Financial Services. These businesses proved the most resilient in 2010, but were dented in 2011 by the general slowdown in investment banking activity.

The group now consolidates investment banking, business lending and treasury services under the umbrella of Global Banking. Combined revenues were $20.0bn in 2017, with net income of $6.96bn. Global Markets covers investment trading and brokerage services. Revenues were $15.95bn with net income of $3.29bn. The latter was the only division to report year-on-year declines.

The group operates principally in North America, although it also has interests in more than 40 international markets, mostly in commercial banking, or in European credit cards. Perhaps the most significant of these territories is China, where BofA has a strategic alliance with China Construction Bank (CCB). The group acquired a 9% holding in CCB in 2005, later raising that stake to around 18%, and the two companies operate a number of joint initiatives. Bank of America sold its retail and commercial banking subsidiary in Hong Kong to CCB in 2006 for $1.25bn. However, it was obliged to reduce its shareholding in its Chinese partner to around 12% in 2009 in order to raise cash to strengthen its balance sheet, and a further series of sales have followed. The final tranche of shares were sold in 2013. In 2006, BofA agreed the sale of several Latin American subsidiaries to Banco Itau of Brazil for around $2.5bn.

Financials

Group revenues for 2008 rose 9% to just under $72.8bn, but the group made a further provision for credit losses of $26.8bn, and net income plunged by 73% to just over $4.0bn. Consolidation of its various purchases as well as the removal of write-backs caused revenues for 2009 to soar to $119.6bn. However a huge charge for loan losses totalling $48.6bn and a $8.5bn payout to the US government and other holders of preferred stock resulted in a $2.2bn loss for ordinary shareholders. The group was still under pressure in 2010, more than its main US rivals, as it continued to wrestle with the fallout from the mortgage crisis. Revenues slipped to $110.2bn, maintaining BofA's position as the US #1 by sales ahead of JPMorganChase. However, there were still substantial but reduced provisions against credit losses as well as impairment charges of $12.4bn to be factored in, resulting in another year of losses, totalling $3.6bn.

Another difficult year followed in 2011, as the bank continued to struggle with credit provisions as well as litigation over mortgage-linked securities. Despite better than expected performance in the final quarter, annual revenues slipped back to $94.4bn (behind JP Morgan Chase). That final quarter - and especially the gain on the sale of shares in China Construction Bank - reversed what had previously been looking like a net loss, pulling the bank back into the black at $1.4bn. However payouts for preferred stock dividends reduced the final earnings attributable to common shareholders to under $100,000.

There was more consistent performance in 2012, despite a host of exceptional charges for litigation, legal settlements and other claims relating to the credit crisis. Total consolidated revenues continued to fall, slipping to $83.33bn. However lower provisions for credit losses and no impairment charges allowed net income to soar. Reported net income virtually tripled to $4.19bn, while the figure attributable to common shareholders topped $2.76bn, from just $85m the year before.

Another strong year in 2013 saw net income soar once more to $11.43bn - or $10.08bn for common shareholders - while revenues rose 7% to $88.94bn. However performance appeared to stall in 2014, with net income plunging by almost 58% to $4.83bn as a result of $16.4bn in litigation expenses. Revenues slipped 5% to $85.12bn.

The elimination of the worst of its bad assets and litigation expenses saw net income soar in 2015 to $15.89bn, the best performance since before the 2008 crisis. Revenues shed 2% to $83.42bn. Total assets were $2,144bn. The group generated almost 87% of revenues and over 92% of profits in the US. Total ex-US revenues were $10.8bn with net income of $1.2bn. For 2016, a 13% jump in net income to $17.91bn was BofA's best result since 2006, while revenues edged up to $83.7bn.

President Trump's Tax Cuts & Jobs Act necessitated a $2.9bn charge against deferred tax assets at the end of 2017. Without the charge, the bank would have matched the record $22bn-plus profit reported a decade earlier. As it was net income came in at $18.2bn, up 2% on the year before, while revenues rose 4% to $87.4bn. Total assets were $2,281bn.

Background

The modern Bank of America Corporation was founded in 1998 by the merger of BankAmerica Corporation with the fast-growing NationsBank of North Carolina. The resulting business became the country's first truly national banking institution, with a network of branch offices which then stretched from coast to coast, through 22 states.

For much of the first half of the 20th century, the first Bank of America dominated the country's banking industry, and put in place many of the systems which we now take for granted. Full credit for this goes to its founder, Amadeo Giannini, one of the first titans of the US financial services industry, who pioneered not only the concept of branch banking, but also diversification into other financial services, and above all the the idea of serving the needs of ordinary Americans rather than simply the wealthy.

The son of Italian immigrants, Giannini became part-owner of his stepfather's grocery store in San Francisco in his 20s, and through hard work, shrewd investments in property, and marriage into an independently wealthy family, was able to retire from that business in his 30s. He inherited from his father-in-law the directorship of a local savings bank, but resigned from that institution when his fellow directors refused to extend loans to ordinary working class families. At the time, this sort of risk was unheard of among traditional banks, who lent only to commercial entities or the wealthy. Instead, Giannini established his own institution, which he called the Bank of Italy, to manage savings and make loans to other immigrant families from the old country. Because these "little people" had no understanding of what a bank did, he promoted deposits and loans in person by ringing doorbells and buttonholing people on the street. However, business was slow until the catastrophic earthquake of 1906, which brought devastation to San Francisco but secured Giannini's future. When the earthquake struck, Giannini was quick-thinking enough to rescue around $2m of deposits from his company's safe in person. Hiding it under a bed of vegetables on a borrowed wagon, he took it back home for safekeeping. While other banks chose to remain closed until their safes could be rescued from the city's rubble, Giannini began trading again immediately, initially from a makeshift plank-and-barrel counter on the city's waterfront. Famously he offered loans to individuals and small businesses to rebuild their livelihoods on the strength of a handshake, and later claimed with pride that every loan he made on that basis had been repaid in full.

This quickly established the Bank of Italy's reputation for trustworthiness and fair dealing, and led to a rapid growth in the business. Quickly Giannini came to realise that a bank which conducted business throughout the state would be less vulnerable to regional difficulties (such as earthquakes), and therefore would always be strong enough to lend to local communities when their need was greatest. To save his ordinary working customers the time and expense of having to travel across the city to visit the bank, Giannini established additional branch offices in and around San Francisco, the first bank in America to do so, and then began its presence into neighbouring cities. By 1920, Giannini's Bank of Italy had become California's biggest, but his ideas were frowned upon by more traditional rivals, whose business had begun to suffer from the expansion of the Bank of Italy's network. The creation of the Federal Reserve in 1917 and lobbying by other banks led to a ban on the creation of new branch offices, so Giannini sidestepped the regulators by acquiring or establishing new banks in other cities. When the restrictions on branch banking were lifted by the state of California in 1927, Giannini merged his various interests to form what he grandly titled the Bank of America. It was the first to establish a presence throughout the state of California, and played a major part in the development of the state's film and wine industries. Among other investments, Bank of Italy funded the launch of the United Artists movie studio in 1923, and loaned Disney the money to complete Snow White. In the 1930s, it was virtually the only bank to invest in the construction of San Francisco's Golden Gate Bridge.

Giannini's dream now was to establish the country's first national bank, and he set out to acquire or establish a series of other banks in neighbouring Western states. This created a new clash with federal regulators, so he established a holding company, Transamerica Corporation, in 1928 to control his various banking businesses as separate subsidiaries. He also diversified into other areas, acquiring insurance company Occidental Life in 1930, and launching another new innovation in 1936, time-plan instalment loans to let customers make capital purchases such as cars, household appliances or home improvements. The rapid expansion of California's population during World War II brought enormous benefits to the business and when Giannini finally retired in 1945, Bank of America had become the nation's biggest bank with assets of over $5bn. However its founder's consistent flouting of banking traditions, and his criticism of parochial interests and the grandees of Wall Street, led to repeated attempts by the financial establishment to curb Transamerica's development.

Nevertheless, the group's growth continued after Giannini's death in 1949, and by 1956 it controlled 23 banks in 11 Western states. That year, however, the company's opponents were finally successful in forcing the break-up of the business. The Bank Holding Company Act of 1956 prohibited banks from owning non-banking businesses as well as branches outside their own home state. This led to the separation a year later of Bank of America and Transamerica, as well as the spin-off of the latter's other banking subsidiaries to form what later became First Interstate Bancorp. However even restricted to its home state, Bank of America had established itself as not just the country's but the world's largest bank by establishing branch offices to serve virtually all corners of California.

The new laws didn't stop the group from innovating. Bank of America was the first bank to fund a small business investment company; and the first to adopt computerised record-keeping. In 1958, it was also the first bank to offer flexible credit on purchases to its customers with the launch of BankAmericard, the world's first credit card. After initial tests in the city of Fresno, the card was extended to the whole of California in 1959, and Bank of America subsequently established licensing agreements with other regional lenders to expand the Americard system nationally. This network was eventually spun off as a separate in entity in 1970 to become Visa (see separate profile).

At around the same time, BankAmerica Corporation was established as a holding company for the operating business, which expanded rapidly over the course of the next decade, using its size and financial strength to establish operations around the globe. Under CEO Tom Clausen, the bank moved aggressively into new areas such as commercial banking, especially outside the US, and assets grew by an average of 15% every year for most of the 1970s, outperforming every other major US financial institution. However that diversification turned sour in the recession of the 1980s as those loans to third world countries, as well as to US farmers and other high risk customers turned sour. Added to that were the huge costs of running the country's biggest branch network. At first the group attempted to trade out this downturn, and accelerated a move into retail brokerage with the purchase of Charles Schwab & Co in 1983. However these financial problems accelerated the following year, and the bank was forced to take more drastic action. Despite a huge restructuring programme, which including the shedding of almost a third of its commercial banking clients and the elimination of several hundred branch offices, BankAmerica's share price plunged, and the company came close to collapse. In 1986 it was targeted for a hostile takeover by none other than First Interstate, the banking group spun off by Transamerica several years earlier. Tom Clausen, who had left the group to run the World Bank, was reappointed as CEO to fight the takeover, and was able to secure the support of BankAmerica's shareholders.

Clausen made further changes to BankAmerica's structure, floating off the Charles Schwab business as well as its retail banking subsidiary in Italy, and introduced new customer services in California such as extended opening hours and more sophisticated ATMs. After three years of heavy losses, the group returned to profit in 1988, and promptly launched a new expansion drive to secure its operations in the US, acquiring a string of banks in Nevada, Washington, Oregon and Arizona, and moving back into international markets. In 1990, its revenues broke the $1bn barrier for the first time, and the reinvigorated group overtook Chase Manhattan to become the country's second biggest banking business behind Citicorp. The acquisition of Californian rival Security Pacific in 1992 was at the time the biggest merger in banking history, and by the end of that year, BankAmerica offered consumer banking services in ten western states, trust and financial services across the entire country, and commercial and corporate banking operations in 35 countries around the globe. In 1993 it was the first American bank to be granted permission to open a full-service branch in mainland China. Further deregulation of the US financial services industry in 1997 allowed the group to move into the securities industry for the first time with the acquisition of investment bank Robertson Stephens & Co. In 1998, the same year that Citicorp merged with Travelers to form the giant Citigroup, BankAmerica kept pace with its rival by agreeing to merge with NationsBank of North Carolina.

NationsBank was itself already one of the country's top five financial institutions as a result of growth even more dramatic than BankAmerica's, under CEO Hugh McColl. Something of a maverick in the upscale banking industry of the time, this tough Southern-born ex-marine made a worthy successor to Amadeo Giannini. NationsBank was itself the product of almost 100 years of mergers and consolidations between banks located mainly in the southern states of North Carolina, Georgia and Virgina. The starting point was the Commercial National Bank of Charlotte, North Carolina, founded in 1874. A series of mergers with other North Carolina financial institutions led eventually to the creation of North Carolina National Bank (NCNB) in 1960. Yet despite further purchases, NCNB was by 1980 still a comparatively modest institution, a one-state bank with a small network of 170 branches across North Carolina. Hugh McColl was appointed as CEO and embarked on aggressive expansion to help NCNB escape from the shadow of its traditional state rival Wachovia. Almost immediately, he acquired a series of small regional banks in Florida, the first-out-of-state bank to do so, and subsequently moved into other neighbouring states. By the end of the decade NCNB operated statewide banks in North Carolina, South Carolina and Texas, and also owned banks in Atlanta, Baltimore and northern Virginia. It was also the first US bank to open a branch in London; the first to operate a full-service securities company; and the first to list its shares on the Tokyo Exchange.

In 1991 it launched a takeover of another Southern-based banking group, C&S/Sovran. In a bid to strip out the political concerns inherent in an amalgamation of banks strongly rooted in the rival states of North Carolina and Virginia, McColl proposed a more grandly patriotic title as the NationsBank. Although the two partners had ranked respectively as the 10th and 12th biggest banks in the US, the merged group was propelled into the national top three with more domestic deposits than New York's Citibank, a market capitalization to rival JP Morgan, and what was now the second-largest branch network in the US after BofA. McColl expanded NationsBank still further with a series of additional acquisitions including Boatmen's Bancshares in 1996 and Barnett Banks of Florida a year later. The merger with Bank of America was an inevitable next step for two groups whose ambitions to become the country's national bank were reflected in both their names.

The deal between BankAmerica and NationsBank was billed at first as a "union of equals". But despite its new name as Bank of America Corporation, it quickly became apparent that NationsBank would be the dominant partner, with Hugh McColl taking the role of chairman & CEO in the enlarged group, which retained NationsBank's base in Charlotte, North Carolina as its HQ. BankAmerica's David Coulter left unexpectedly three weeks after completion of the deal. In fact the integration of the two giant companies proved far more difficult than McColl had anticipated, and BofA's financial results over the next couple of years were well below expectations, although the company put the blame on bad loans and credit problems. At the same time, McColl initiated a huge restructuring cutting some 10,000 jobs, before retiring in 2001. His protege Ken Lewis took his place as chairman & CEO, and placed a new emphasis on delivering disciplined organic growth, consolidating the bank's existing resources and renewing its commitment to additional services and customer satisfaction. That approach quickly regained the confidence of investors, and allowed BofA's share price to soar.

In 2004, Lewis began looking at acquisitions again. The purchase of FleetBoston Financial Corp that year for a very generous $48bn in shares ranked as the 3rd biggest deal in banking history after the Citicorp-Travelers merger, and the deal which had created BofA in 1998. However it successfully extended the group's franchise throughout the northeast and gave improved access to wealthy customers in the New England area. This was followed by the purchase of a 9% stake in China Construction Bank in 2005, and the acquisition of MBNA at the beginning of 2006, a deal which established a leadership position for BofA in North American credit cards. In 2007, BofA acquired US Trust, one of the largest and most highly respected wealth management firms. Later the same year, Bank of America gave its support to an attempt by Barclays of the UK to acquire Dutch giant ABN Amro by agreeing a side deal to take over ABN's US subsidiary, the Boston-based LaSalle Bank, for $21bn. The latter was one of the main businesses being targeted by Royal Bank of Scotland, the leader of a European consortium that had mounted a rival bid for ABN Amro. Despite a legal challenge by the consortium to block Bank of America's purchase of LaSalle, the deal was eventually approved by Dutch courts despite the consortium's successful bid for the rest of ABN Amro.

Kenneth Lewis is the man responsible for transforming what was originally a regional lender into a national champion, initiating a string of acquisitions between 2004 and 2009. He was forced to relinquish the role of chairman in May 2009, and stepped down as CEO and director at the end of that year. His successor as president & CEO was Brian Moynihan, formerly president, global consumer & small business banking. Steele Alphin, previously the effective #2 at the bank, with the title of chief administrative officer, left the company in early 2010 following Moynihan's appointment. Moynihan was appointed as chairman as well in 2014. Moynihan's appointment was followed by several reshuffles among the management team. A second major restructuring in 2011 led to the departures of consumer banking head Joe Price and wealth management head Sallie Krawcheck.

Last full revision 7th November 2016

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