Friday’s Headlines: Possible BofA Retreat Symptomatic of Wall Street Woes

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While the entire banking industry is poised to retreat – probably permanently – Bank of America’s announcement of possible plans to shed some of its branches stands out, as the retail lender’s mammoth market share in some cities is substantial, especially in the West. The Wall Street Journal’s Deal Journal wrote a post breaking down Bank of America’s share of bank deposits in various areas. In Los Angeles, the bank holds more than 20 percent of deposits, while in Dallas, nearly a third of bank deposits are by the Charlotte, N.C. giant. Any retreat would signal a reversal of a remarkable story of growth, as the Journal details in a fascinating story today:

For the past 20 years, Bank of America and predecessor NationsBank Corp. relentlessly acquired other financial institutions in a form of manifest destiny that shook the U.S. banking industry. The 1998 takeover of BankAmerica Corp., of San Francisco, and 2004 purchase of FleetBoston Financial Corp., Boston, left the combined bank with sizable muscle in nearly every large metropolitan area in the country.

Over the course of its long expansion, Bank of America, currently the country's second-largest bank by assets, pushed its way into every nook and cranny of the financial system. But in doing so the bank left itself more exposed than any major bank to the severe economic downturn of 2008-2009, the weak recovery since and a litany of mortgage-related lawsuits.

The possible shedding was noted as a contingency plan should Bank of America be forced to raise capital to cushion itself in the face of turmoil. While bank executives say such a move is unlikely, yet another Journal story detailing the likely permanent shrinking of the global banking sector suggests otherwise.

 

Other News:

Aon, the insurance broker, will move its corporate headquarters to London from Chicago. [Aon press release]

JPMorgan Chase’s Q4 profit fell 23 percent on investment banking. [WSJ]

JPMorgan Chase’s 2011 profit rose 9 percent on credit card business and commercial lending. [DealBook]

First Niagara will sell 37 of the HSBC branches it bought last year to satisfy antitrust regulators. [Reuters]

Goldman’s exodus of 50 partners last year was among the largest since the firm went public in 1999. [Dealbook]

Australian banks are poised to fire thousands. [Reuters]

Those graduating with business degrees in 2011 earned an average of $48,144, with economics majors making an average of $54,500. [CNN Money]

Deutsche is shrinking its equity business in Austria, and some employees may be moved to Frankfurt or London. [Bloomberg]

ING may have to sell more assets to repay state aid. [WSJ]

KKR was the top private equity firm, investing $18.8 billion in 44 deals in 2011. [Businessweek]

HSBC seeks to remain among the top five underwriters of initial public offerings in Hong Kong this year. [Bloomberg]

Software maker Splunk hired Morgan Stanley to lead an IPO that may bring in $1 billion. [Bloomberg]

The biggest shareholder of Ace Mutual Savings Bank, a South Korean lender whose operations were suspended last year by the regulator, was found dead yesterday ahead of scheduled questioning by prosecutors. [Businessweek]

Lloyds CEO Antonio Horta-Osorio gave up his bonus after taking a leave of absence and overseeing a third-quarter loss. [NY Times]

Hong Kong brokers protest their lunch breaks being reduced to 60 minutes. [Bloomberg]

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