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Bank of America
Tagline
Net Worth
$262,200,000,000
Started in (City)
San Francisco
Started in (Country)
United States of America
Incorporation Date
17th December, 1904
Bankruptcy Date
-
Founders
- Amadeo Peter Giannini
About
Bank of America or The Bank of America Corporation is an American multinational investment bank and financial services holding company. Its headquarter is in Charlotte, North Carolina, with principal hubs in New York City, London, Hong Kong, Dallas, and Toronto. Founded in San Francisco, Bank of America is the second biggest banking organization in the United States, after JP Morgan Chase, and the eighth biggest bank in the world. It is one of the Big Four banking institutions of the USA which services about 10.73% of all American bank deposits, in direct competition with JPMorgan Chase, Citigroup, and Wells Fargo.
Beginning
The history of Bank of America dates back to October 17, 1904, while Amadeo Pietro Giannini founded the Bank of Italy in San Francisco. In 1922, Bank of America, Los Angeles became established with Giannini as a minority investor. The banks merged in 1928 and consolidated it with different bank holdings. On November 3, 1930, Bank of Italy became renamed to Bank of America National Trust and Savings Association, which became the only such distinct bank in the United States at that time.
After 1909 regulation in California allowed for branch banking in the state, Giannini introduced branch banking and established the bank’s first branch outside San Francisco in San Jose in 1909. Bank of America extended outside California in 1983, with its acquisition, orchestrated in part via way of means of Stephen McLin, of Seafirst Corporation of Seattle, Washington, and its totally owned banking subsidiary, Seattle-First National Bank. The eastern portion of the bank can be traced back to 1784 when Massachusetts Bank has chartered the first iteration of FleetBoston, which Bank of America acquired in 2004. Bank of America’s next massive acquisition came in 1992. The company acquired Security Pacific Corporation and its subsidiary Security Pacific National Bank in California and other banks in Arizona, Idaho, Oregon, and Washington, which Security Pacific had acquired in a series of acquisitions in the late 1980s. This represented, at the time, the biggest bank acquisition in history. Later that year, Bank of America extended into Nevada by acquiring Valley Bank of Nevada. In 1994 BankAmerica acquired the Continental Illinois National Bank and Trust Co. of Chicago. NationsBank of Charlotte acquired Bank of America in October 1998 in what became the biggest bank acquisition in history at that time. The merged bank took the better-recognized name of Bank of America.
Road to Success
In 2004, Bank of America announced it would purchase Boston-based bank FleetBoston Financial for $47 billion in cash and stock. By merging with Bank of America, all of its banks and branches have been given the Bank of America logo. On June 30, 2005, Bank of America announced it would purchase credit card giant MBNA for $35 billion in cash and stock. The Federal Reserve Board gave final approval to the merger on December 15, 2005, and the merger closed on January 1, 2006. The acquisition of MBNA supplied Bank of America a leading domestic and foreign credit card issuer. The combined Bank of America Card Services organization, which includes the previous MBNA, had more than 40 million U.S. accounts and nearly $140 billion in tremendous balances. Under Bank of America, the operation became renamed FIA Card Services.
On January 11, 2008, Bank of America announced that it would purchase Countrywide Financial for $4.1 billion. In April and May 2014, Bank of America sold a dozen branches in Michigan to Huntington Bancshares. As a part of its new method, Bank of America is targeted at developing its mobile banking platform. As of 2014, Bank of America has 31 million active online customers and 16 million mobile customers. By 2018, the number of mobile customers has extended to 25.3 million and the number of locations fell to 4,411 at the end of June.
In 2005, Bank of America acquired a 9% stake in China Construction Bank, one of the Big Four banks in China, for $3 billion. It represented the company’s biggest foray into China’s developing banking sector.
In November 2011, Bank of America announced plans to divest the maximum of its stake in the China Construction Bank. In September 2013, Bank of America sold its remaining stake in the China Construction Bank for as much as $1.5 billion.
Challenges
With increasing competition day by day Bank of America which was once the number one bank in America was pushed back to the second position by JP Morgan Chase. Culture shift in the society, the rising expectation of the customers to have better smarter, convenient and accessible services; Bank of America has been facing a lot of backslashes by the customer for its declining customer satisfaction charts. Security breaches, out-dated mobile experiences have pulled the chart downwards in customer retention.
Failures
Bank of America experienced massive losses in 1986 and 1987 because of the placement of a series of bad loans in the Third World, specifically in Latin America. The company fired its CEO, Sam Armacost in 1986. Though Armacost blamed the issues on his predecessor, A.W. (Tom) Clausen, Clausen became appointed to replace Armacost. The losses led to a massive decline of BankAmerica stock, as a result making it vulnerable to a hostile takeover. It sold its Finance America subsidiary to Chrysler and the brokerage firm Charles Schwab and Co. back to Mr. Schwab. It additionally sold Bank of America and Italy to Deutsche Bank. By the time of the 1987 stock-market crash, Bank of America’s share price had fallen to $8, however, through 1992 it had rebounded mightily to become one of the largest gainers of that half-decade.
Achievements
- Bank of America in October 1998 in what became the biggest bank acquisition in history at that time. The merged bank took the better-recognized name of Bank of America.
- In 2004, Bank of America announced it would purchase Boston-based bank FleetBoston Financial for $47 billion in cash and stock.
Subsidies
- Merill Edge
- Merill
- Fia Card Services
- 1st Franklin Financial
CEOs
- Brian Moynihan
- Ken Lewis