The Finance Owl

Banks – Loans – Mortgages – Money

Bank of AmericaThe Bank of America Corporation is one of the largest banks in North America. The following article focuses upon the history of the Bank of America, the services it offers, details about its principal operating locations and provides links to other articles related to the Bank of America.

The History of the Bank of America

The Bank of America was formed in the latter part of the 1920s as the result of a merger between the Bank of Italy (based in San Francisco) and the Bank of America, whose business interests were solely based at that time in Los Angeles. The merger resulted in a rebranding of the expanded Bank of America company leading to the merged bank being called BankAmerica. BankAmerica was headed by Amadeo Giannini (founder of the Bank of Italy) and co-chaired by E. Monette (founder of the Bank of America).

The Bank of America’s Growth


Amadeo Giannini had ambitious plans to create a bank trading at a national level. He expanded BankAmerica operations into the western U.S. states, in the process moving into the insurance market (with the support of his holding company, the Transamerica Corporation). However, Giannini’s plans were somewhat thwarted by two factors.

Firstly, BankAmerica and TransAmerica’s relationship was curtailed by the 1956 Bank Holding Company Act, which forbade banks from possessing non-banking organizations. Secondly, federal banking regulation dictated that banks should not be active interstate. This forced the Bank of America into moving its interstate banking operations into a new organization, that ultimately became First Interstate Bancorp.

    In 1958, the Bank of America (BankAmerica) created the BankAmericard credit card, which was rebranded in 1975 as the VISA card.


    It was not until the 1980s (after the 1967 Bank Holding Company Act) that the Bank of America was able to operate outside of California. A new organization called BankAmerica Corporation was created as a parent company for the Bank of America and its holdings. BankAmerica moved into Washington by acquiring the Seafirst Corporation of Seattle along with its holding, the Seattle-First National Bank in 1983.

    The Bank of America (BankAmerica) and the 1980s

    Between 1986 and 1987 BankAmerica made significant losses as a result of a number of bad loans in Latin America. This effected the decreased value of BankAmerica stock making it an ideal candidate for a hostile takeover. BankAmerica had to offload parts of its business in order to fend of the advances of a number of interested financial institutions, which further decreased the value of its stock. But BankAmerica weathered the storm, which got perticularly nasty during the stock market crash of 1987, to turn its fortunes around from 1992.

    Bank of America and Expansion in the 1990s

    • 1992 – BankAmerica made the largest bank acquisition recorded at that point in time when it purchased Security Pacific and its subsidiary banking operations. BankAmerica also acquired the Valley Bank of Nevada.
    • 1994 – BankAmerica purchased the Continental Illinois National Bank and Trust Co. of Chicago. Combined with the 1992 acquisitions, this made BankAmerica the second largest bank in America by 1997.
    • 1998 – BankAmerica was purchased by Nationsbank (becoming the largest banking acquistion itself) and rebranded as the Bank of America Corporation. The Bank of America headquarters was relocated to Charlotte (North Carolina).
    • 2004 – the Bank of America acquired Louisville from National City Corp. and rebranded it as BA Merchant Services, offering finance solutions to the healthcare and travel industries. The Bank of America also purchased FleetBoston Financial to establish itself as the largest holder of the U.S. deposit market share (around $513 billion), as well as giving it a foot in the north-eastern states.
    • 2006 – MBNA was acquired by the Bank of America in a package worth £35 billion. In the spring of 2006 the Bank of America sold its BankBoston holdings in Chile and Uruguay to the Banco Itaú.
    • 2007 – The Bank of America purchased the United States Trust Company in a deal worth $3.3 billion during the summer of 2006, and in the fall LaSalle Corporate Finance, LaSalle Bank Corporation and ABN Amro North America were acquired from ABN Amro for approximately $21 billion.
    • 2008 – The Bank of America announced that Countrywide Financial will be its next acquisition.

    The Bank of America’s Current Operations

    Today the Bank of America principally operates in the U.S (approximatley 90% of its profits are derived from the U.S. market) and it continues to expand by purchasing assets.

    Its consumer base is managed by its GC&SSB team (Global Consumer and Small Business Banking), which is the largest organization within the Bank of America Corporation. The GC&SSB area manages credit card and consumer banking services, which amounts to around 50% of its business currently.

    In terms of corporate offerings, the Bank of America’s GCIB group (Global Corporate and Investment Banking) provides a number of services to corporate customers: advice about mergers and acquisitions,underwriting services and trading in fixed income, capital and equity markets.

    Investment management services are run by its GWIM team (Global Wealth and Investment Management). This is an area in which the Bank of America has lofty ambitions. It intends to become one of the top 5 investment banks in the world.

    The Bank of America Outside of the U.S.

    The Bank of America presently has interests in the China Construction Bank (China), and operates as the Bank of America in Chennai, Mumbai, New Delhi, Bangalore and Calcutta (India).