The year 2007 has brought with it the worst credit crisis. Bank of America is one institution that has successfully survived this credit crisis. It would not have a slightest impact of the credit crisis if bankofamerica has not purchased Merrill Lynch.
Bank of America is one of the largest financial services corporations which is the largest bank by assets and the largest commercial bank by deposits. The number one underwriter of global high yield debt is bank America.
The bank of America has passed through various phases over the decades. It has a very diverse and rich history. Initially it was Bank of Italy founded in San Francisco in the year 1904.
Over the years this bank underwent various mergers and acquisitions and finally became Bank of America in 1929.
The founder of the Bank of America was Amadeo Giannini. Giannini set out to build a national bank by expanding into most of the western states as well as into the insurance industry, under the aegis of his holding company, Transamerica Corporation. Regulators succeeded in forcing the separation of Transamerica Corporation and Bank of America under the Clayton Antitrust Act in 1953. Bank of America and Transamerica were separated because a passage of the Bank Holding Company Act of 1956 prohibited banks from owning non-banking subsidiaries such as insurance companies. Bank of America was again started expanding its domestic consumer banking activity outside California after a change in federal banking legislation and regulation in 1980’s.
The Bank of America introduced the BankAmericard in 1958, which was later called VISA after the change of name in 1975.
Bank America Corporation was established for the purpose of owning Bank of America and its subsidiaries. Bank America expanded outside California in the year 1983 by acquiring Seafirst Corporation of Seattle, Washington.
BankAmerica was dealt huge losses in 1986 and 1987 by the placement of a series of bad loans in the Third World, particularly in Latin America. Bank America suffered great losses in 1986 and 1987 due to series of bad placement of loans in the Third World, especially in Latin America. In 1992 Bank America acquired its California rival, Security Pacific Corporation and its subsidiary Security Pacific National Bank in California and other banks in Arizona, Idaho, Oregon, and Washington. Bank America also acquired Valley Bank of Nevada fro expansion in Nevada.
In 1997 NationsBank acquired Bank America for US$64.8 billion which resulted in the combined assets of US$570 billion and 4,800 branches in 22 states.
In 2004, Bank of America purchased FleetBoston Financial for $47 billion in cash and stock. All of the banks and branches of FleetBoston Financial were given the Bank of America logo. FleetBoston was the seventh largest bank in United States at the time of merger, with $197 billion in assets, over 20 million customers and revenue of $12 billion.
1 January 2006 Bank of America purchased MBNA, a credit card giant, for $35 billion in cash and stock. In the year 2996, Bank of America expanded its business in Brazil, Chile and Uruguay.
Bank of America purchased The United States Trust Company from the Charles Schwab Corporation for $3.3 billion in 2007. Bank of America’s acquisition of ABN AMRO North America and LaSalle Bank in 2007 lead to an increase in its presence in Illinois, Michigan, and Indiana by 411 branches, 1.4 million retail customers, 17,000 commercial bank clients, and 1,500 ATMs. In the year 2008, Bank of America bought Countrywide Financial for $4.1 billion.
The latest acquisition of Bank of America is of Merrill Lynch. The deal closed in 2009.
With all these acquisitions and mergers Bank of America expanded greatly. But it sustained due to its commitment and honesty to its customers.
