Tunnel Guard
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A man drove for about 6-7 hundred miles and reached a jungle. The moment he
has seen the jungle all his energies are down. He is left with no idea. He
is a...
14 years ago
Thursday, October 23, 2008
SLEPT ANALYSIS ?
SLEPT ANALYSIS is a tool used to analyse a business environment. It's PEST analysis with one aditional dimention. SLEPT stands for Social, Legal, Economic, Political and Technological factors. Social factors relate to the habits of the consumer, as well as the status of the general public (for example, the average age and income of people in a certain area). Legal factors refers to government legislation that places constraints or obligations upon a business; businesses must adapt to changes in the law quickly in order to avoid prosecution. Economic factors are often effected by social changes, for example through booms and slumps in the economy; in a boom most businesses benefit, whereas in a slump most businesses feel a negative effect. Other economic factors are tied in with legal issues, for example a change in the minimum wage. Political factors are similar to legal changes, except that this relates to changes in government influence in general; for example, businesses situated within the European Union have been affected by legislation passed by the EU and then implemented into the law of their own country. Technological factors play a particularly significant role in modern business, and businesses must be aware of new technology in order to keep up with the rapid changes that are occurring in this field.
DECISION MAKING
Decision making can be regarded as an outcome of mental processes (cognitive process) leading to the selection of a course of action among several alternatives. Every decision making process produces a final choice.[1] The output can be an action or an opinion of choice. Overview Human performance in decision making terms has been subject of active research from several perspectives. From a psychological perspective, it is necessary to examine individual decisions in the context of a set of needs, preferences an individual has and values he/she seeks. From a cognitive perspective, the decision making process must be regarded as a continuous process integrated in the interaction with the environment. From a normative perspective, the analysis of individual decisions is concerned with the logic of decision making and rationality and the invariant choice it leads to.[2] Yet, at another level, it might be regarded as a problem solving activity which is terminated when a satisfactory solution is found. Therefore, decision making is a reasoning or emotional process which can be rational or irrational, can be based on explicit assumptions or tacit assumptions. Logical decision making is an important part of all science-based professions, where specialists apply their knowledge in a given area to making informed decisions. For example, medical decision making often involves making a diagnosis and selecting an appropriate treatment. Some research using naturalistic methods shows, however, that in situations with higher time pressure, higher stakes, or increased ambiguities, experts use intuitive decision making rather than structured approaches, following a recognition primed decision approach to fit a set of indicators into the expert's experience and immediately arrive at a satisfactory course of action without weighing alternatives. Also, recent robust decision efforts have formally integrateduncertainty into the decision making process. According to behavioralist Isabel Briggs Myers, a person's decision making process depends on a significant degree on their cognitive style.[3] Myers developed a set of four bi-polar dimensions, called the Myers-Briggs Type Indicator (MBTI). The terminal points on these dimensions are: thinking and feeling; extroversion and introversion; judgment and perception; andsensing and intuition. She claimed that a person's decision making style is based largely on how they score on these four dimensions. For example, someone who scored near the thinking, extroversion, sensing, and judgment ends of the dimensions would tend to have a logical, analytical, objective, critical, and empirical decision making style. Other studies suggest that these national or cross-cultural differences exist across entire societies. For example, Maris Martinsons has found that American, Japanese and Chinese business leaders each exhibit a distinctive national style of decision making.[4] Some of the decision making techniques that we use in everyday life include: For example, a person is considering two jobs. At the first job option the person has a 60% chance of getting a 30% raise in the first year. And at the second job option the person has an 80% chance of getting a 10% raise in the first year. The decision maker would calculate the expected value of each option, calculating the probability multiplied by the increase of value. (0.60*0.30=0.18 [option a] 0.80*0.10=0.08 [option b]) The person deciding on the job would chose the option with the highest expected value, in this example option number one. An alternative may be to apply one of the processes described below, in particular in the Business and Management section. Biases can creep into our decision making processes. Many different people have made a decision about the same question (e.g. "Should I have a doctor look at this troubling breast cancer symptom I've discovered?" "Why did I ignore the evidence that the project was going over budget?") and then craft potential cognitive interventions aimed at improving decision making outcomes. Below is a list of some of the more commonly debated cognitive biases. The anterior cingulate cortex (ACC) and orbitofrontal cortex are brain regions involved in decision making processes. A recent neuroimaging study, Interactions between decision making and performance monitoring within prefrontal cortex, found distinctive patterns of neural activation in these regions depending on whether decisions were made on the basis of personalvolition or following directions from someone else. Another recent study by Kennerly, et al. (2006) found that lesions to the ACC in the macaque resulted in impaired decision making in the long run of reinforcement guided tasks suggesting that the ACC is responsible for evaluating past reinforcement information and guiding future action. Emotion appears to aid the decision making process: Styles and methods of decision making were elaborated by the founder of Predispositioning Theory, Aron Katsenelinboigen. In his analysis on styles and methods Katsenelinboigen referred to the game of chess, saying that “chess does disclose various methods of operation, notably the creation of predisposition—methods which may be applicable to other, more complex systems.”[5] In his book Katsenelinboigen states that apart from the methods (reactive and selective) and sub-methods (randomization, predispositioning, programming), there are two major styles – positional and combinational. Both styles are utilized in the game of chess. According to Katsenelinboigen, the two styles reflect two basic approaches to the uncertainty: deterministic (combinational style) and indeterministic (positional style). Katsenelinboigen’s definition of the two styles are the following. The combinational style is characterized by In defining the combinational style in chess, Katsenelinboigen writes: The combinational style features a clearly formulated limited objective, namely the capture of material (the main constituent element of a chess position). The objective is implemented via a well defined and in some cases in a unique sequence of moves aimed at reaching the set goal. As a rule, this sequence leaves no options for the opponent. Finding a combinational objective allows the player to focus all his energies on efficient execution, that is, the player’s analysis may be limited to the pieces directly partaking in the combination. This approach is the crux of the combination and the combinational style of play.[5] The positional style is distinguished by “Unlike the combinational player, the positional player is occupied, first and foremost, with the elaboration of the position that will allow him to develop in the unknown future. In playing the positional style, the player must evaluate relational and material parameters as independent variables. ( … ) The positional style gives the player the opportunity to develop a position until it becomes pregnant with a combination. However, the combination is not the final goal of the positional player—it helps him to achieve the desirable, keeping in mind a predisposition for the future development. The Pyrrhic victory is the best example of one’s inability to think positionally.”[6] The positional style serves to a) create a predisposition to the future development of the position; The positional style gives the player the opportunity to develop a position until it becomes pregnant with a combination. Katsenelinboigen writes:[edit]Decision making processes topics
[edit]Cognitive and personal biases
[edit]Neuroscience perspective
[edit]Styles and methods of decision making
b) induce the environment in a certain way;
c) absorb an unexpected outcome in one’s favor;
d) avoid the negative aspects of unexpected outcomes.
“As the game progressed and defense became more sophisticated the combinational style of play declined. . . . The positional style of chess does not eliminate the combinational one with its attempt to see the entire program of action in advance. The positional style merely prepares the transformation to a combination when the latter becomes feasible.”[7]
ORGANISING MODEL
The organising model, as the term refers to trade unions (and sometimes other social-movement organisations), is a broad conception of how those organisations should recruit, operate and advance the interests of their members. It typically involves many full-time organisers, who work by building up confidence, strong networks and leaders within the workforce, and confrontational campaigns involving large numbers of union members. It is often contrasted with the Service model, and sometimes (see below) to a 'Rank-and-file' model. The Organising Model is strongly linked to Social Movement Unionism and Community Unionism. The prominence of the model, and the debate over its worth, is at varying stages in the United States, the United Kingdom, Ireland, Australia and New Zealand. The debate is important because the model is one of the more credible contributions to the discussion of how trade unions can reverse the trend of declining membership which they are experiencing in most 'advanced' industrial nations, and recapture some of the political power which the labour movement has lost over the past century
[edit]Organising and the history of trade unions
Trade unions originally existed to organise their members democratically, and during their early growth, they typically put a strong emphasis on active recruitment and militant rank and file action, including strikes. By no means did they always unambiguously act in the interests of their members, but they were perceived of as organisations which existed to struggle for collective action. Particularly since the end of World War II, however, the trade unions have tended more and more to act as service providers for their members: providing legal advice, training and so on; eschewing mass-based, militant action. During the '60s, '70s and onward, this trend deepened, with union density among the workforce falling all the while, until it could be measured at between 10% and 20% in many industrialised countries. In the context of this history, the organising model is in principle not so much a new conception, as an attempt to recapture the essence of the labour movement. However, the way in which it has been recaptured has been quite particular.
[edit]Defining the Organising Model
It is often claimed that the principle underlying the organising model is that of giving power directly to union members. While the practical exercise of the model sometimes leaves something to be desired in this respect (see below), its embodiment of a set of campaigning and organisational approaches is much less ambiguous. The organising model in its ideal type has these features:
- Proactive recruitment drives.
- Proactive campaigning, involving a large commitment of resources and large numbers of members.
- Creative campaigning tactics - including demonstrations, street theatre, media stunts, direct action, civil disobedience, music etc.
- Strong emphasis on the importance of personal contact in organising. Organisers will often put in long hours talking to workers about their situation, and what they believe the union can help them achieve. Visits to workers' homes will often be a component of this.
- Acceptance of the view that workers need to take some appreciable responsibility for winning union struggles and making the union strong. Hence an attitude geared toward empowering workers.
- As a central tool of both recruitment and campaigning, the identification and recruitment of leaders from among the workforce, to spread information about the union, and encourage others to join and take action.
- These leaders working together in a campaign committee, to steer campaigns [1].
- A conception of leadership in which leaders are those willing to take the initiative and contribute effort, rather than one based on authority. It will be hoped that leadership (as confidence to initiation organisation with others) will spread as broadly as possible.
- Strong relationship (especially in America) to Social Movement Unionism and Community Unionism which (respectively) seek to ally the labour movement to broader social movements and to local community organisations - including for example, campaigns such as United Students Against Sweatshops and ACORN.
- Employment of relatively large numbers of full-time staff union organizers and member organizers in order to facilitate the above.
- In order to finance this, typically a relatively high level of membership dues (at least for industrial unions, as opposed to craft unions.)
Unions that employ the organizing model often try to apply the above tactics in "internal"/representational/bargaining campaigns, not just "external" organising/recruitment campaigns. Indeed, many unions that employ the organising model attempt to "bargain to organise" -- that is, win a greater right to organize non-union workers through pressuring an employer through using current members collective strength. In contrast, the service model focuses on the provision of services - such as legal advice, training, or even consumer discount programmes - to members. Practitioners of this model will generally avoid industrial, or direct, action of any kind, preferring to develop a 'good relationship' with employers. Typically, but not necessarily, service model unions will be less democratic in structure.
[edit]Resurgence in America
In the mid 1980s, the SEIU union found itself in a state of crisis. Dwindling membership threatened to finish it off entirely. A period of intense internal discussion gave rise to the view that a radical program was needed to rebuild the union, and make it relevant to current and potential members. The Justice for Janitors campaign was launched as the organizational spearhead of this realization; beginning in Denver, Colorado in 1985. Working along the lines described above, the SEIU experienced a huge growth in membership, and a significant number of high-profile public victories for workers. (Though some proportion of the SEIU's membership growth has resulted from mergers, such as with 1199). In 1988, an AFL-CIO organisedteleconference of trade unionists recognised the potential of the nascent organising model, gave it its name, and resolved to spread it throughout the trade-union movement - this was an element in the model's popularisation. The success of Justice for Janitors did not go unnoticed and other unions in America have increasingly used its tactics. In 1995, former SEIU President John Sweeney was elected president of the AFL-CIO on the New Voice slate, on a platform of spreading the organising model across the members of the federation. The extent of the success of this is disputed, with some suggesting that more rhetoric has changed than anything, but it did have at least some effect. The SEIU is currently the largest private-sector union in America, trailing only the public-sector NEA in active membership, and has received numerous plaudits for its victories. It should be noted that the tactics and strategies of the SEIU and Justice for Janitors go beyond the organising model which is, as has been described, an approach to local level organising and campaigning. It applies to a drive for recruitment of members and leaders on the level of a firm or city. Other aspects of the SEIU's strategies are national or international. For instance, the drive to gain industry-wide coverage across a large geographical base - i.e. to organise janitors not only within one building, but across a whole city, state and eventually all across the USA - or the advocacy of union mergers.
[edit]Resurgence in the UK and Ireland
The British Trades Union Congress (TUC) inaugurated an Organising Academy in 1998, to fulfill a similar role to that of the AFL-CIO's Organising Institute in the USA (or ACTU'sOrganising Works programme in Australia). Whilst the graduates of the Academy have produced positive results [2], in general the model has not been implemented in the UK with the same comprehensive commitment as it has been by some unions in the USA. There are questions raised by writers on Industrial Relations about whether the transfer of the SEIU's organising model has been faithful, or whether a watered down, less radical version has been instantiated. Sarah Oxenbridge [3], for example, writes "community organising and organising model methods provided the means by which Californian Unionists put their 'social movement unionism' philosophies and strategies into practice, on a daily basis (see Heery 1998). However, it may be that most British Trade Unionists will instead see the organising model as - more simply - a range of recruitment tactics, and will pick and choose from amongst these tactics." The Transport and General Workers Union (T&G) has begun to make some of the more serious moves of any of the larger British unions to learn from the SEIU's strategies - though some smaller unions (such as Community) have been applying the organising model for some years. In 2005, the T&G launched a Justice for Cleaners campaign, which has been organising workers in Canary Wharf, the Houses of Parliament, and, towards the end of the year, on the London Underground. In the former of these two, improvements in wages have been won by workers. The tactics of Social Movement Unionism have been utilised, insofar as the campaign organisers have worked closely with, for example, The East London Citizens Organisation (TELCO), which has brought in members of faith groups and other trade union branches. However, there remain concerns about the T&G's commitment to rank and file workers' action, considering how the union acted during the Gate Gourmet strike. The Irish general union SIPTU established an Organising Unit in 2004 and its president, Jack O'Connor, set as his objective the transformation of SIPTU - hitherto firmly committed to a servicing agenda - into an organising union. SIPTU is also seeking to learn from the experience of the SEIU. It remains to be seen how (and whether) a commitment to the organising model of trade unionism can be reconciled with the union's traditional support for national 'Social Partnership'.
[edit]History in Australia
Prior to the 1980s, the Australian labour movement did not explicitly conceptualise the relationship between the union hierarchy and the membership in terms of "organisation" or "services." Traditional distinctions, inherited from long-term conflict, between the "Groupers" (a branch of the a Catholic-oriented National Civic Council) on one hand and the Communist Party of Australia on the other, have dictated the terrain of membership/leadership relationships. These relationships were fundamentally those of small unions which catered to their members by combining elements of rank-and-file organising, hierarchical organising, and gaining benefits for members through industrial or non-industrial action. Successful unions met their members' demands for militancy, or anti-militancy, and for an internal union culture which developed a feeling of belonging. Both "right wing" and "left wing" unions could be bureaucratic, or member controlled, militant or anti-militant. However, after a wave of massive industrial unrest and unprecedented increases in wages and conditions during the 1970s, the union movement became more restrained in their demands, and part of the official apparatus of government during the ALP-led, neo-corporatist, Accord period (1983-96). While unions hadamalgamated prior to the Accord, and the Australian Council of Trade Unions had itself absorbed other lesser peak industrial councils, the accord period and the later enterprise bargainingperiod encouraged mergers into super unions. These super unions often obliterated previous small union identities and loyalties (on both the "left" and "right" of the trade union movement) and created unions with a relatively artificial internal culture. Often the largest union in the merger imposed its internal culture on the other divisions of the new union. Additionally, during the period of mergers, the traditional links between members, local organisers, industrial officers, branches and the peak leaderships of unions broke down. While the pre-1980s period of trade unionism in Australia was never characterised by deep links between leaderships and rank and file members, the structures within unions which allowed rank and file members to feel involved and this part of the union broke down. This presented a challenge to the union movement. Another key feature of the model in Australia is the Organising Works program which was established in 1994 to recruit organisers from union members and university students. Organising works is a relatively unique program in Australia, in that it combines explicit training in trade unionism with an apprenticeship system with specific trade unions. Generally, organising works has focused recruitment on university students rather than existing trade union members, and only a limited number of unions have participated in organising works.
[edit]Criticisms
Most practical criticism of the model has emerged as a criticism of the practice of the model by the SEIU and other organising unions, especially in America. Criticisms from the left generally contrast (explicitly or not) 'organising' to a 'rank and file' model, in which the confrontational style of organising, and broad-based member involvement in campaigning is supplemented by broad-based member power. Criticisms from the Right are either arguments in favour of service model unionism, or attacks on some of the trade union practices which are often involved in strikes.
[edit]Criticisms from the Left
There have been criticisms that the SEIU's practice in some ways has been antithetical to real internal democracy, and therefore antithetical to real worker confidence and power. There are a number of issues [4]. One is that the SEIU has compelled a number of its Locals to merge, and has placed others under centrally appointed trusteeship (rather than directly elected management), uprooting local democracy. Another is that the layer of professional organisers, many of whom are 'Anglo' college graduates and lifetime organisers, rather than poor immigrants with years spent in low-paid jobs, has assumed disproportionate power in the structures that do exist. Critics claim that the net function of these trends - centralising and an emphasis on paid staff organisers - has been to produce a certain distance between the membership and bureaucracy. There is an increasingly vocal layer of rank-and-file dissidents in the SEIU, over issues of democracy and unsatisfactory campaigning. In a few locals, the rank and file has even organised campaigns against union appointees, or set up alternative unions. There are also criticisms over the political stance taken by the SEIU in certain issues, which call into question the political honesty and pro-working-class credentials of elements of the leadership. For instance, in Los Angeles, the local SEIU acted against the local Bus Riders' Union (BRU), a community organisation; proposing a cut in public-transport funding in order to finance better health care system. A BRU organiser has suggested that the SEIU should instead have taken up the BRU's offer of a joint campaign for 'new taxes on corporations and a reduction in prison construction.' [5]
[edit]Criticisms from the Right
Critics argue that the Organising model is inappropriate to the task of unions in the modern global economy. They say that industrial disputes of the type that organising engenders are harmful to the national economies in which they occur: by increasing uncertainty and raising wages (labour costs), they will make economies less attractive to inward investment. Hence, working people will suffer in the long term, as the less investment there is, the less jobs there will be. The conclusion of those who take this line is that unions should emphasise their service aspects, particularly those that contribute toward the well-being of the employer as well as the employee. An example of an argument of this form can be found in the pamphlet co-written by British Labour MP John Healey and published by the TUC [6], which emphasizes how unions can grow, and serve the business interests of employers by taking on the role of training their members. In addition, there are the criticisms levelled by the anti-union Right, who often associate collective action with the tyranny of 'Big labour', contrasted to the free operation of the capitalist labour market. Characteristic examples of this type of criticism can be found in public statements of the anti-union National Right to Work Legal Defense Foundation [7].
Monday, October 13, 2008
BIO-GRAPHY OF ETTORE BUGATTI
Ettore Bugatti
Ettore Arco Isidoro Bugatti
BORN:-(September 15, 1881, Milan, died on August 21, 1947) was an Italian automobile designer and manufacturer.
He came from a notably artistic family with its roots in Milan. He was the elder son of Teresa Lorioli and her husband Carlo Bugatti (1856–1940), an important Art Nouveau furniture and jewelry designer. His younger brother was a renowned animal sculptor, Rembrandt Bugatti (1884–1916), his aunt, Luigia Bugatti, was the wife of the painter Giovanni Segantini, and his paternal grandfather, Giovanni Luigi Bugatti, was an architect and sculptor.
Before founding his own automobile company, Ettore designed a number of engines and vehicles for others. Prinetti & Stucchi produced his 1898 Type 1. From 1902 through 1904, Dietrich built his Type 3/4 and Type 5/6/7 under the Dietrich-Bugatti marque. In 1907, Bugatti went to work for the Deutz Gasmotoren Fabrik, designing the Type 8/9.
On his own time, Bugatti developed the Type 2 (in 1900 and 1901), and the 1903 Type 5. While at Deutz, Bugatti built his Type 10 in the basement of his home. In 1913, Bugatti designed a small car for Peugeot, the Type 19 "Bébé".
Although born in Italy, Bugatti's eponymous automobile company was set up in Molsheim in the Alsace region, now part of France. Ettore Bugatti was its technical innovator, developing a number of engines and chassis for the numerous models produced over the next three decades. The company was known for the advanced engineering in its premium road cars and its success in early Grand Prix motor racing, a Bugatti winning the first ever Monaco Grand Prix.
Ettore Bugatti also designed a successful motorized railcar, the Autorail, and an airplane, though this never flew. His son, Jean Bugatti, was killed on August 11, 1939 at the age of 30, while testing a Type 57 tank-bodied race car near the Molsheim factory. After that, the company's fortunes began to decline. World War II ruined the factory in Molsheim, and the company lost control of the property. During the war, Bugatti planned a new factory at Levallois in Paris and designed a series of new cars.
Ettore Bugatti was buried in the Bugatti family plot at the municipal cemetery in Dorlisheim near Molsheim in the Bas-Rhin département of the Alsace region of France.
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Type | 1910s | 1920s | 1930s | 1940s | 1950s | 1960s | 1963–86 | 1980s | 1990s | 2000s | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 0 | 1 | 2 | 7 | 8 | 9 | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | ||
| Company | Bugatti | Bugatti Automobili S.p.A | Bugatti Automobiles S.A.S. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner |  Ettore Bugatti / Roland Bugatti | Romano Artioli |  Volkswagen AG | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Touring car | Type 30 / Type 49 | Type 57 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Type 46 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Limousine | Type 41 Royale | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roadster | Type 13 / Brescia Tourer | Type 55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Coupé | Type 101 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sports car | Type 13 | Type 18 Garros | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Saturday, October 4, 2008
HISTORY OF BANK OF AMERICA
Bank of America
Bank of America Corporation
Type
Public (NYSE: BAC TYO: 8648)
Founded
(as "Bank of Italy")
San Francisco, California (1928)
(acquiring banks)
Charlotte, North Carolina (NationsBank) (1874)Boston, Massachusetts (FleetBoston) (1784)
Headquarters
Charlotte, North Carolina, United States
Key people
Kenneth D. Lewis, Chairman/CEOJ. Steele Alphin, CAOJoe L. Price, CFOAmy Woods Brinkley, Chief Risk Officer
Industry
Banking
Products
Financial services
Revenue
▲ $119.19 billion (2007)[1]
Net income
▲ $14.98 billion (2007)[1]
Total assets
$1.72 trillion (2007)[1]
Employees
210,000 (2007)[2]
Website
http://www.bankofamerica.com/ http://www.bofa.com/
Bank of America (NYSE: BAC TYO: 8648) is the largest commercial bank in the United States by deposits and market capitalization.[3][4]
It is a member of Federal Deposit Insurance Corporation (FDIC).
Contents[hide]
1 Corporate history
1.1 Bank of Italy
1.2 Growth in California
1.3 Expansion outside of California
1.4 Merger of NationsBank and BankAmerica
1.5 History since 1998
1.5.1 Acquisition of National Processing Company
1.5.2 FleetBoston Financial merger
1.5.3 Purchase of MBNA
1.5.4 Divestiture of operations in Brazil, Chile and Uruguay
1.5.5 Purchase of US Trust
1.5.6 Acquisition of ABN AMRO North America and LaSalle Bank
1.5.7 Acquisition of Countrywide Financial
1.5.8 Acquisition of Merrill Lynch
2 Bank of America divisions
2.1 Consumer
2.2 Corporate
2.3 Investment management
2.4 International operations
3 Corporate governance
3.1 Directors
4 Social responsibility
4.1 Diversity and inclusion
4.2 Environmental record
4.3 Student Leader
5 Controversies
6 Bank of America corporate buildings
7 Major sponsorships
7.1 Sports
7.2 Corporate sponsorships
7.3 Regional sponsorships:
7.3.1 Arts and culture
7.3.2 Baseball
7.3.3 Basketball
7.3.4 American Football
7.3.5 Soccer
7.3.6 NASCAR, International Speedway Corp. (ISC) and Speedway Motorsports, Inc. (SMI)
7.3.7 Golf
8 See also
9 References
10 Further reading
11 External links
//
[edit] Corporate history
Before 1998, the Bank of America organization that exists today was known as NationsBank and was previously known in earlier years as North Carolina National Bank before being abbreviated to "NCNB" as it branched out of its home base of Charlotte, North Carolina. In 1998, NationsBank acquired San Francisco-based BankAmerica and renamed the corporation "Bank of America".
[edit] Bank of Italy
Many historical banks across the United States have been consolidated into the Bank of America. The most prominent is the Bank of Italy, founded in San Francisco by Amadeo Giannini in 1904 based on catering to immigrants. Amedeo was raised by the Fava/Stanghellini family when his father was shot while trying to collect on a $10.00 debt. When the 1906 San Francisco earthquake struck, Giannini was able to get all of the deposits out of the bank building and away from the fires.
In the late 1920s, Giannini approached Orra E. Monnette, President and founder of Bank of America, Los Angeles, about a merger between the two entities. The Los Angeles based bank had exhibited strong growth throughout the 1920s, due in part to its success in developing an advanced branch banking system. The merger was completed in early 1929 and took the name Bank America. The combined company was headed by Giannini with Monnette serving as co-Chair.
[edit] Growth in California
Giannini sought to build a national bank, expanding into most of the western states as well as into the insurance industry, under the aegis of his holding company, Transamerica Corporation. The passage of the Bank Holding Company Act of 1956, prohibited banks from owning non-banking subsidiaries such as insurance companies. Bank of America and Transamerica were separated, with the latter company continuing in the insurance business. However, federal banking regulators prohibited Bank of America's interstate banking activity, and Bank of America's domestic banks outside California were forced into a separate company that eventually became First Interstate Bancorp, which was acquired by Wells Fargo and Company in 1996. It was not until the 1980s with a change in federal banking legislation and regulation that Bank of America was again able to expand its domestic consumer banking activity outside California.
These technologies also enabled credit cards to be linked directly to individual bank accounts. In 1958, the bank introduced the BankAmericard, which changed its name to VISA in 1975.[5] A consortium of other California banks came up with Master Charge (now MasterCard) in order to compete with BankAmericard.
[edit] Expansion outside of California
Bank of America Corporate Center, located in the center of uptown Charlotte, North Carolina.
Following the passage of the Bank Holding Company Act of 1967, BankAmerica Corporation was established for the purpose of owning Bank of America and its subsidiaries.
BankAmerica expanded outside California in 1983 with its acquisition of Seafirst Corporation of Seattle, Washington, and its wholly owned banking subsidiary, Seattle-First National Bank. Seafirst was at risk of seizure by the federal government after becoming insolvent due to a series of bad loans to the oil industry. BankAmerica continued to operate its new subsidiary as Seafirst rather than Bank of America until the 1998 merger with NationsBank.
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. The company fired its CEO, Sam Armacost. Though Armacost blamed the problems on his predecessor, A.W. (Tom) Clausen, Clausen was appointed to replace Armacost. The losses resulted in a huge decline of BankAmerica stock, making it vulnerable to a hostile takeover. First Interstate Bancorp of Los Angeles (which had originated from banks once owned by BankAmerica), launched such a bid in the fall of 1986, although BankAmerica rebuffed it, mostly by selling its FinanceAmerica subsidiary to Chrysler, and by selling the brokerage firm Charles Schwab and Co. back to Mr. Schwab. By the time of the 1987 stock market crash, BankAmerica's share price had fallen to $8, but by 1992 it had rebounded mightily to become one of the biggest gainers of that half-decade.
BankAmerica's next big acquisition came in 1992. The company 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 (which Security Pacific had acquired in a series of acquisitions in the late 1980s). This was, at the time, the largest bank acquisition in history. Federal regulators, however, forced the sale of Security Pacific's Washington subsidiary, Rainier Bank, as the combination of Seafirst and Rainier would have given BankAmerica too large a share of the market in that state. Later that year, BankAmerica expanded into Nevada by acquiring Valley Bank of Nevada.
In 1994, BankAmerica acquired the Continental Illinois National Bank and Trust Co. of Chicago, which had become federally owned as part of the same oil industry debacle emanating from Oklahoma City's Penn Square Bank, that had brought down numerous financial institutions including Seafirst. At the time, no bank had the resources to bail out Continental, so the federal government operated the bank for nearly a decade. Illinois at that time regulated branch banking extremely heavily, so Bank of America Illinois was a single-unit bank until the 21st century. BankAmerica moved its national lending department to Chicago in an effort to establish a financial beachhead in the region.
These mergers helped BankAmerica Corporation to once again become the largest U.S. bank holding company in terms of deposits, but the company fell to second place in 1997 behind fast-growing NationsBank Corporation, and to third in 1998 behind North Carolina's First Union Corp. In 1998, BankAmerica was purchased by North Carolina-based NationsBank, and changed the headquarters to Charlotte, North Carolina.
[edit] Merger of NationsBank and BankAmerica
Bank of America Corporate Center building in the background, the tallest skyscraper between Philadelphia and Atlanta.
In 1997, BankAmerica lent D. E. Shaw & Co., a large hedge fund, $1.4bn so that the hedge fund would run various businesses for the bank. However, D.E. Shaw suffered significant loss after the 1998 Russia bond default. BankAmerica was acquired by NationsBank later that year.
The purchase of BankAmerica Corp. by the NationsBank Corporation was the largest bank acquisition in history at that time. While the deal was technically a purchase of BankAmerica Corporation by NationsBank, the deal was structured as merger with NationsBank renamed to Bank of America Corporation, and Bank of America NT&SA, changing its name to Bank of America, N.A. as the remaining legal bank entity. The bank still operates under Federal Charter 13044 which was granted to Giannini's Bank of Italy on March 1, 1927. However, SEC filings before 1998 are listed under NationsBank, not BankAmerica.
Following the US$64.8 billion acquisition of BankAmerica by NationsBank, the resulting Bank of America had combined assets of US$570 billion, as well as 4,800 branches in 22 states. Despite the mammoth size of the two companies, federal regulators insisted only upon the divestiture of 13 branches in New Mexico, in towns that would be left with only a single bank following the combination. This is because branch divestitures are only required if the combined company will have a larger than 25 percent FDIC deposit market share in a particular state or 10 percent deposit market share overall.
[edit] History since 1998
In 2001, Bank of America CEO and chairman Hugh McColl stepped down and named Ken Lewis as his successor. Lewis's greater focus on financial discipline and efficiency contrasted greatly with the expansionary mergers and acquisition strategy of his predecessor.
[edit] Acquisition of National Processing Company
In 2004, Bank of America purchased Louisville, Kentucky-based National Processing Company for $1.4 billion from National City Corp. The company was renamed BA Merchant Services. The company provides financial solutions for travel and healthcare companies. BA Merchant Services is headquartered in Louisville, with a call center in El Paso, Texas.
[edit] FleetBoston Financial merger
Also in 2004, Bank of America acquired Boston, Massachusetts-based FleetBoston Financial for $47 billion in an all-stock deal to solidify Bank of America's position as the bank with the largest FDIC-rated deposit market share in the United States with $513 billion in deposits, well ahead of the number two bank holding company, newly-merged JPMorgan Chase-Bank One with $353 billion in deposits and number three Wells Fargo & Co. with $228 billion (as of 30 June 2003). This acquisition gave Bank of America access to the northeastern market.
Bank of America branch location in Lowell, MA; formerly a FleetBoston location.
[edit] Purchase of MBNA
On 30 June 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 15 December 2005, and the merger closed on 1 January 2006. The acquisition of MBNA provided Bank of America a leading credit card issuer at home and abroad. The combined Bank of America Card Services organization, including the former MBNA—had more than 40 million U.S. accounts and nearly $140 billion in outstanding balances.
[edit] Divestiture of operations in Brazil, Chile and Uruguay
In May 2006, Bank of America and Banco Itaú (Investimentos Ita S.A.) entered into an acquisition agreement through which Itaú agreed to acquire BankBoston's operations in Brazil and was granted an exclusive right to purchase Bank of America's operations in Chile and Uruguay. A deal was signed in August 2006 under which Itaú agreed to purchase Bank of America's operations in Chile and Uruguay. Prior to the transaction, BankBoston's Brazilian operations included asset management, private banking, a credit card portfolio, and small, middle-market, and large corporate segments. It had 66 branches and 203,000 clients in Brazil. BankBoston in Chile had 44 branches and 58,000 clients and in Uruguay it had 15 branches. In addition, there was a credit card company, OCA, in Uruguay, which had 23 branches. BankBoston N.A. in Uruguay, together with OCA, jointly served 372,000 clients. While the BankBoston name and trademarks were not part of the transaction, as part of the sale agreement, they cannot be used by Bank of America in Brazil, Chile or Uruguay following the transactions. Hence, the BankBoston name has disappeared from Brazil, Chile and Uruguay. The Itaú stock received by Bank of America in the transactions has allowed Bank of America's stake in Itaú to reach 11.51%. Banco Boston do Brazil had been founded in 1947.
[edit] Purchase of US Trust
On 20 November 2006, Bank of America announced the purchase of The United States Trust Company for $3.3 billion, from the Charles Schwab Corporation. US Trust had about $100 billion of Assets Under Management and over 150 years of experience. The deal closed 1 July 2007.[6]
[edit] Acquisition of ABN AMRO North America and LaSalle Bank
On September 14, 2007, Bank of America won approval from the Federal Reserve to acquire ABN AMRO North America, LaSalle Bank Corporation and LaSalle Corporate Finance from ABN AMRO for $21 billion. With this combination Bank of America will have 1.7 trillion in assets. A Dutch court blocked the sale until it was later approved in July. The acquisition was completed on October 1, 2007.
The deal increased Bank of America's presence in Illinois, Michigan, and Indiana by 411 branches, 17,000 commercial bank clients, 1.4 million retail customers and 1,500 ATMs. Bank of America has become the largest bank in the Chicago market with 197 offices and 14% of the deposit share, passing up JPMorgan Chase.
LaSalle Bank and LaSalle Bank Midwest branches adopted the Bank of America name on 5 May 2008.[7]
[edit] Acquisition of Countrywide Financial
On August 23, 2007 the company announced a $2 billion repurchase agreement for Countrywide Financial. This purchase of preferred stock was arranged to provide a return on investment of 7.25% per annum and provided the option to purchase common stock at a price of $18 per share.[8]
Following that initial investment, on January 11, 2008, Bank of America announced that they would buy Countrywide Financial for $4.1 billion.[9] This acquisition, which closed on July 1, 2008, gave the bank a substantial market share of the mortgage business, and access to Countrywide's expertise, technology, and employees for servicing mortgages.[10] The acquisition was seen as preventing the potential of bankruptcy for Countrywide. Countrywide denied that it was close to bankruptcy. Countrywide provides mortgage servicing for nine million mortgages valued at $1.4 trillion USD as of December 31, 2007.[11] However, Countrywide is under FBI investigation due to possible fraud in home loans and mortages, therefore Bank of America states that by 2009 they will be "officially" affiliated to Countrywide.[12]
On July 1, 2008, Bank of America Corporation completed its purchase of Countrywide Financial Corporation, which makes the corporation the nation's leading mortgage originator and servicer controlling between 20 to 25 percent of the home loan market.[13] The deal was structured to merge Countrywide with the Red Oak Merger Corporation, which Bank of America created as an independent subsidiary. It has been speculated that the deal was structured this way to prevent a potential bankruptcy stemming from large losses in Countrywide to hurt the parent organization by keeping Countrywide bankruptcy remote.[14]
[edit] Acquisition of Merrill Lynch
The Wall Street Journal reported September 15, 2008, that Merrill Lynch will be sold to Bank of America for about US$50 billion or about $29 per share.[15] This will make Bank of America the largest financial services company in the world. [16]
[edit] Bank of America divisions
Bank of America ATM
Typical Bank of America local office
Bank of America generates 90% of its revenues in its domestic market and continues to buy businesses in the US. The core of Bank of America's strategy is to be the number one bank in its domestic market. It has achieved this through key acquisitions.[17]
[edit] Consumer
Global Consumer and Small Business Banking (GC&SBB) is the largest division in the company, and deals primarily with consumer banking and credit card issuance. The acquisition of FleetBoston and MBNA significantly expanded its size and range of services, resulting in about 51% of the company's total revenue in 2005. It competes directly with the retail banking divisions of Citigroup and JPMorgan Chase. The GC&SBB organization includes over 5,700 retail branches and over 17,000 ATMs across the United States.
Bank of America is a member of the Global ATM Alliance, a joint venture of several major international banks that allows customers of the banks to use their ATM card or check card at another bank within the Global ATM Alliance with no fees when traveling internationally. Other participating banks are Barclays (United Kingdom), BNP Paribas (France), China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank (Canada) and Westpac (Australia and New Zealand).[18] This however does not include cash advances or any of their credit card services which when used abroad deduct a 3% transaction fee and a 3% cash advance fee on top of the currency transaction fee. Unfortunately, most USA customers traveling in France will be unable to use their ATM cards at BNP Paribas kiosks because they only accept ATM cards which contain computer chips (Smart Card).
Bank of America, N.A is a nationally chartered bank, regulated by the Office of the Comptroller of the Currency, Department of the Treasury.
[edit] Corporate
Global Corporate and Investment Banking (GCIB), also known as Banc of America Securities LLC, provides mergers and acquisitions advisory, underwriting, capital markets, as well as sales & trading in fixed income and equities markets. Its strongest groups include Leveraged Finance, Syndicated Loans, and mortgage-backed securities. It also has one of the largest research teams on Wall Street. Banc of America Securities LLC is based in New York City, with major offices also located in Charlotte, Chicago, San Francisco, Tokyo, Frankfurt, London, and Mumbai. Ken Lewis, the ambitious chief executive who masterminded the bank's expansion into exotic new businesses including GCIB, bluntly ruled out any further acquisitions in its investment banking division. "I've had all of the fun I can stand in investment banking at the moment," he told analysts.
[edit] Investment management
Global Wealth and Investment Management manages assets of institutions and individuals. It is among the 10 largest U.S. wealth managers (ranked by private banking assets under management in accounts of $1 million or more as of June 30, 2005). In July 2006, Chairman Ken Lewis announced that GWIM's total assets under management exceeded $500 billion. GWIM has five primary lines of business: Premier Banking & Investments (including Bank of America Investment Services, Inc.), The Private Bank, Family Wealth Advisors, Columbia Management Group, and Banc of America Specialist.
Bank of America has recently spent $675 million building its US investment banking business and is looking to become one of the top five investment banks worldwide. "Bank of America already has excellent relationships with the corporate and financial institutions world. Its clients include 98% of the Fortune 500 companies in the US and 79% of the Global Fortune 500. These relationships, as well as a balance sheet that most banks would kill for, are the foundations for a lofty ambition."[19]
Bank of America is currently constructing a massive new headquarters for its New York City operations. The skyscaper will be located on 42nd Street and Avenue of the Americas, at Bryant Park, and will feature state of the art, environmentally-friendly technology throughout its 1.2 million square feet (111,484 m²) of office space. The building will be the headquarters for the company's investment banking division, and will also host most of Bank of America's New York-based staff.
[edit] International operations
In 2005, Bank of America acquired a 9% stake in China Construction Bank, China's second largest bank, for $3 billion.[20] It represented the company's largest foray into China's growing banking sector. Bank of America currently has offices in Hong Kong, Shanghai, and Guangzhou and is looking to greatly expand its Chinese business as a result of this deal.
Bank of America has invested in India as an emerging market. Currently, Bank of America maintains branches in Mumbai, Chennai, Calcutta, New Delhi and Bangalore. For the fiscal year ending March 31, 2006 Bank of America reported an 80% increase in net profit.[21]
Bank of America operated under the name BankBoston in many other Latin American countries, including Brazil. In 2006, Bank of America sold all BankBoston's operations to Brazilian bank Banco Itaú, in exchange for Itaú shares. The BankBoston name and trademarks were not part of the transaction and, as part of the sale agreement, cannot be used by Bank of America. (That meant the extinction of the BankBoston brand.)
Bank of America's Global Corporate and Investment Banking spans the Globe with divisions in United States, Europe and Asia. The U.S. headquarters are located in New York, European headquarters are based in London and Asia's headquarters are split between Singapore & Hong Kong.
BY:-ANAND SHANKAR
Bank of America Corporation
Type
Public (NYSE: BAC TYO: 8648)
Founded
(as "Bank of Italy")
San Francisco, California (1928)
(acquiring banks)
Charlotte, North Carolina (NationsBank) (1874)Boston, Massachusetts (FleetBoston) (1784)
Headquarters
Charlotte, North Carolina, United States
Key people
Kenneth D. Lewis, Chairman/CEOJ. Steele Alphin, CAOJoe L. Price, CFOAmy Woods Brinkley, Chief Risk Officer
Industry
Banking
Products
Financial services
Revenue
▲ $119.19 billion (2007)[1]
Net income
▲ $14.98 billion (2007)[1]
Total assets
$1.72 trillion (2007)[1]
Employees
210,000 (2007)[2]
Website
http://www.bankofamerica.com/ http://www.bofa.com/
Bank of America (NYSE: BAC TYO: 8648) is the largest commercial bank in the United States by deposits and market capitalization.[3][4]
It is a member of Federal Deposit Insurance Corporation (FDIC).
Contents[hide]
1 Corporate history
1.1 Bank of Italy
1.2 Growth in California
1.3 Expansion outside of California
1.4 Merger of NationsBank and BankAmerica
1.5 History since 1998
1.5.1 Acquisition of National Processing Company
1.5.2 FleetBoston Financial merger
1.5.3 Purchase of MBNA
1.5.4 Divestiture of operations in Brazil, Chile and Uruguay
1.5.5 Purchase of US Trust
1.5.6 Acquisition of ABN AMRO North America and LaSalle Bank
1.5.7 Acquisition of Countrywide Financial
1.5.8 Acquisition of Merrill Lynch
2 Bank of America divisions
2.1 Consumer
2.2 Corporate
2.3 Investment management
2.4 International operations
3 Corporate governance
3.1 Directors
4 Social responsibility
4.1 Diversity and inclusion
4.2 Environmental record
4.3 Student Leader
5 Controversies
6 Bank of America corporate buildings
7 Major sponsorships
7.1 Sports
7.2 Corporate sponsorships
7.3 Regional sponsorships:
7.3.1 Arts and culture
7.3.2 Baseball
7.3.3 Basketball
7.3.4 American Football
7.3.5 Soccer
7.3.6 NASCAR, International Speedway Corp. (ISC) and Speedway Motorsports, Inc. (SMI)
7.3.7 Golf
8 See also
9 References
10 Further reading
11 External links
//
[edit] Corporate history
Before 1998, the Bank of America organization that exists today was known as NationsBank and was previously known in earlier years as North Carolina National Bank before being abbreviated to "NCNB" as it branched out of its home base of Charlotte, North Carolina. In 1998, NationsBank acquired San Francisco-based BankAmerica and renamed the corporation "Bank of America".
[edit] Bank of Italy
Many historical banks across the United States have been consolidated into the Bank of America. The most prominent is the Bank of Italy, founded in San Francisco by Amadeo Giannini in 1904 based on catering to immigrants. Amedeo was raised by the Fava/Stanghellini family when his father was shot while trying to collect on a $10.00 debt. When the 1906 San Francisco earthquake struck, Giannini was able to get all of the deposits out of the bank building and away from the fires.
In the late 1920s, Giannini approached Orra E. Monnette, President and founder of Bank of America, Los Angeles, about a merger between the two entities. The Los Angeles based bank had exhibited strong growth throughout the 1920s, due in part to its success in developing an advanced branch banking system. The merger was completed in early 1929 and took the name Bank America. The combined company was headed by Giannini with Monnette serving as co-Chair.
[edit] Growth in California
Giannini sought to build a national bank, expanding into most of the western states as well as into the insurance industry, under the aegis of his holding company, Transamerica Corporation. The passage of the Bank Holding Company Act of 1956, prohibited banks from owning non-banking subsidiaries such as insurance companies. Bank of America and Transamerica were separated, with the latter company continuing in the insurance business. However, federal banking regulators prohibited Bank of America's interstate banking activity, and Bank of America's domestic banks outside California were forced into a separate company that eventually became First Interstate Bancorp, which was acquired by Wells Fargo and Company in 1996. It was not until the 1980s with a change in federal banking legislation and regulation that Bank of America was again able to expand its domestic consumer banking activity outside California.
These technologies also enabled credit cards to be linked directly to individual bank accounts. In 1958, the bank introduced the BankAmericard, which changed its name to VISA in 1975.[5] A consortium of other California banks came up with Master Charge (now MasterCard) in order to compete with BankAmericard.
[edit] Expansion outside of California
Bank of America Corporate Center, located in the center of uptown Charlotte, North Carolina.
Following the passage of the Bank Holding Company Act of 1967, BankAmerica Corporation was established for the purpose of owning Bank of America and its subsidiaries.
BankAmerica expanded outside California in 1983 with its acquisition of Seafirst Corporation of Seattle, Washington, and its wholly owned banking subsidiary, Seattle-First National Bank. Seafirst was at risk of seizure by the federal government after becoming insolvent due to a series of bad loans to the oil industry. BankAmerica continued to operate its new subsidiary as Seafirst rather than Bank of America until the 1998 merger with NationsBank.
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. The company fired its CEO, Sam Armacost. Though Armacost blamed the problems on his predecessor, A.W. (Tom) Clausen, Clausen was appointed to replace Armacost. The losses resulted in a huge decline of BankAmerica stock, making it vulnerable to a hostile takeover. First Interstate Bancorp of Los Angeles (which had originated from banks once owned by BankAmerica), launched such a bid in the fall of 1986, although BankAmerica rebuffed it, mostly by selling its FinanceAmerica subsidiary to Chrysler, and by selling the brokerage firm Charles Schwab and Co. back to Mr. Schwab. By the time of the 1987 stock market crash, BankAmerica's share price had fallen to $8, but by 1992 it had rebounded mightily to become one of the biggest gainers of that half-decade.
BankAmerica's next big acquisition came in 1992. The company 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 (which Security Pacific had acquired in a series of acquisitions in the late 1980s). This was, at the time, the largest bank acquisition in history. Federal regulators, however, forced the sale of Security Pacific's Washington subsidiary, Rainier Bank, as the combination of Seafirst and Rainier would have given BankAmerica too large a share of the market in that state. Later that year, BankAmerica expanded into Nevada by acquiring Valley Bank of Nevada.
In 1994, BankAmerica acquired the Continental Illinois National Bank and Trust Co. of Chicago, which had become federally owned as part of the same oil industry debacle emanating from Oklahoma City's Penn Square Bank, that had brought down numerous financial institutions including Seafirst. At the time, no bank had the resources to bail out Continental, so the federal government operated the bank for nearly a decade. Illinois at that time regulated branch banking extremely heavily, so Bank of America Illinois was a single-unit bank until the 21st century. BankAmerica moved its national lending department to Chicago in an effort to establish a financial beachhead in the region.
These mergers helped BankAmerica Corporation to once again become the largest U.S. bank holding company in terms of deposits, but the company fell to second place in 1997 behind fast-growing NationsBank Corporation, and to third in 1998 behind North Carolina's First Union Corp. In 1998, BankAmerica was purchased by North Carolina-based NationsBank, and changed the headquarters to Charlotte, North Carolina.
[edit] Merger of NationsBank and BankAmerica
Bank of America Corporate Center building in the background, the tallest skyscraper between Philadelphia and Atlanta.
In 1997, BankAmerica lent D. E. Shaw & Co., a large hedge fund, $1.4bn so that the hedge fund would run various businesses for the bank. However, D.E. Shaw suffered significant loss after the 1998 Russia bond default. BankAmerica was acquired by NationsBank later that year.
The purchase of BankAmerica Corp. by the NationsBank Corporation was the largest bank acquisition in history at that time. While the deal was technically a purchase of BankAmerica Corporation by NationsBank, the deal was structured as merger with NationsBank renamed to Bank of America Corporation, and Bank of America NT&SA, changing its name to Bank of America, N.A. as the remaining legal bank entity. The bank still operates under Federal Charter 13044 which was granted to Giannini's Bank of Italy on March 1, 1927. However, SEC filings before 1998 are listed under NationsBank, not BankAmerica.
Following the US$64.8 billion acquisition of BankAmerica by NationsBank, the resulting Bank of America had combined assets of US$570 billion, as well as 4,800 branches in 22 states. Despite the mammoth size of the two companies, federal regulators insisted only upon the divestiture of 13 branches in New Mexico, in towns that would be left with only a single bank following the combination. This is because branch divestitures are only required if the combined company will have a larger than 25 percent FDIC deposit market share in a particular state or 10 percent deposit market share overall.
[edit] History since 1998
In 2001, Bank of America CEO and chairman Hugh McColl stepped down and named Ken Lewis as his successor. Lewis's greater focus on financial discipline and efficiency contrasted greatly with the expansionary mergers and acquisition strategy of his predecessor.
[edit] Acquisition of National Processing Company
In 2004, Bank of America purchased Louisville, Kentucky-based National Processing Company for $1.4 billion from National City Corp. The company was renamed BA Merchant Services. The company provides financial solutions for travel and healthcare companies. BA Merchant Services is headquartered in Louisville, with a call center in El Paso, Texas.
[edit] FleetBoston Financial merger
Also in 2004, Bank of America acquired Boston, Massachusetts-based FleetBoston Financial for $47 billion in an all-stock deal to solidify Bank of America's position as the bank with the largest FDIC-rated deposit market share in the United States with $513 billion in deposits, well ahead of the number two bank holding company, newly-merged JPMorgan Chase-Bank One with $353 billion in deposits and number three Wells Fargo & Co. with $228 billion (as of 30 June 2003). This acquisition gave Bank of America access to the northeastern market.
Bank of America branch location in Lowell, MA; formerly a FleetBoston location.
[edit] Purchase of MBNA
On 30 June 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 15 December 2005, and the merger closed on 1 January 2006. The acquisition of MBNA provided Bank of America a leading credit card issuer at home and abroad. The combined Bank of America Card Services organization, including the former MBNA—had more than 40 million U.S. accounts and nearly $140 billion in outstanding balances.
[edit] Divestiture of operations in Brazil, Chile and Uruguay
In May 2006, Bank of America and Banco Itaú (Investimentos Ita S.A.) entered into an acquisition agreement through which Itaú agreed to acquire BankBoston's operations in Brazil and was granted an exclusive right to purchase Bank of America's operations in Chile and Uruguay. A deal was signed in August 2006 under which Itaú agreed to purchase Bank of America's operations in Chile and Uruguay. Prior to the transaction, BankBoston's Brazilian operations included asset management, private banking, a credit card portfolio, and small, middle-market, and large corporate segments. It had 66 branches and 203,000 clients in Brazil. BankBoston in Chile had 44 branches and 58,000 clients and in Uruguay it had 15 branches. In addition, there was a credit card company, OCA, in Uruguay, which had 23 branches. BankBoston N.A. in Uruguay, together with OCA, jointly served 372,000 clients. While the BankBoston name and trademarks were not part of the transaction, as part of the sale agreement, they cannot be used by Bank of America in Brazil, Chile or Uruguay following the transactions. Hence, the BankBoston name has disappeared from Brazil, Chile and Uruguay. The Itaú stock received by Bank of America in the transactions has allowed Bank of America's stake in Itaú to reach 11.51%. Banco Boston do Brazil had been founded in 1947.
[edit] Purchase of US Trust
On 20 November 2006, Bank of America announced the purchase of The United States Trust Company for $3.3 billion, from the Charles Schwab Corporation. US Trust had about $100 billion of Assets Under Management and over 150 years of experience. The deal closed 1 July 2007.[6]
[edit] Acquisition of ABN AMRO North America and LaSalle Bank
On September 14, 2007, Bank of America won approval from the Federal Reserve to acquire ABN AMRO North America, LaSalle Bank Corporation and LaSalle Corporate Finance from ABN AMRO for $21 billion. With this combination Bank of America will have 1.7 trillion in assets. A Dutch court blocked the sale until it was later approved in July. The acquisition was completed on October 1, 2007.
The deal increased Bank of America's presence in Illinois, Michigan, and Indiana by 411 branches, 17,000 commercial bank clients, 1.4 million retail customers and 1,500 ATMs. Bank of America has become the largest bank in the Chicago market with 197 offices and 14% of the deposit share, passing up JPMorgan Chase.
LaSalle Bank and LaSalle Bank Midwest branches adopted the Bank of America name on 5 May 2008.[7]
[edit] Acquisition of Countrywide Financial
On August 23, 2007 the company announced a $2 billion repurchase agreement for Countrywide Financial. This purchase of preferred stock was arranged to provide a return on investment of 7.25% per annum and provided the option to purchase common stock at a price of $18 per share.[8]
Following that initial investment, on January 11, 2008, Bank of America announced that they would buy Countrywide Financial for $4.1 billion.[9] This acquisition, which closed on July 1, 2008, gave the bank a substantial market share of the mortgage business, and access to Countrywide's expertise, technology, and employees for servicing mortgages.[10] The acquisition was seen as preventing the potential of bankruptcy for Countrywide. Countrywide denied that it was close to bankruptcy. Countrywide provides mortgage servicing for nine million mortgages valued at $1.4 trillion USD as of December 31, 2007.[11] However, Countrywide is under FBI investigation due to possible fraud in home loans and mortages, therefore Bank of America states that by 2009 they will be "officially" affiliated to Countrywide.[12]
On July 1, 2008, Bank of America Corporation completed its purchase of Countrywide Financial Corporation, which makes the corporation the nation's leading mortgage originator and servicer controlling between 20 to 25 percent of the home loan market.[13] The deal was structured to merge Countrywide with the Red Oak Merger Corporation, which Bank of America created as an independent subsidiary. It has been speculated that the deal was structured this way to prevent a potential bankruptcy stemming from large losses in Countrywide to hurt the parent organization by keeping Countrywide bankruptcy remote.[14]
[edit] Acquisition of Merrill Lynch
The Wall Street Journal reported September 15, 2008, that Merrill Lynch will be sold to Bank of America for about US$50 billion or about $29 per share.[15] This will make Bank of America the largest financial services company in the world. [16]
[edit] Bank of America divisions
Bank of America ATM
Typical Bank of America local office
Bank of America generates 90% of its revenues in its domestic market and continues to buy businesses in the US. The core of Bank of America's strategy is to be the number one bank in its domestic market. It has achieved this through key acquisitions.[17]
[edit] Consumer
Global Consumer and Small Business Banking (GC&SBB) is the largest division in the company, and deals primarily with consumer banking and credit card issuance. The acquisition of FleetBoston and MBNA significantly expanded its size and range of services, resulting in about 51% of the company's total revenue in 2005. It competes directly with the retail banking divisions of Citigroup and JPMorgan Chase. The GC&SBB organization includes over 5,700 retail branches and over 17,000 ATMs across the United States.
Bank of America is a member of the Global ATM Alliance, a joint venture of several major international banks that allows customers of the banks to use their ATM card or check card at another bank within the Global ATM Alliance with no fees when traveling internationally. Other participating banks are Barclays (United Kingdom), BNP Paribas (France), China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank (Canada) and Westpac (Australia and New Zealand).[18] This however does not include cash advances or any of their credit card services which when used abroad deduct a 3% transaction fee and a 3% cash advance fee on top of the currency transaction fee. Unfortunately, most USA customers traveling in France will be unable to use their ATM cards at BNP Paribas kiosks because they only accept ATM cards which contain computer chips (Smart Card).
Bank of America, N.A is a nationally chartered bank, regulated by the Office of the Comptroller of the Currency, Department of the Treasury.
[edit] Corporate
Global Corporate and Investment Banking (GCIB), also known as Banc of America Securities LLC, provides mergers and acquisitions advisory, underwriting, capital markets, as well as sales & trading in fixed income and equities markets. Its strongest groups include Leveraged Finance, Syndicated Loans, and mortgage-backed securities. It also has one of the largest research teams on Wall Street. Banc of America Securities LLC is based in New York City, with major offices also located in Charlotte, Chicago, San Francisco, Tokyo, Frankfurt, London, and Mumbai. Ken Lewis, the ambitious chief executive who masterminded the bank's expansion into exotic new businesses including GCIB, bluntly ruled out any further acquisitions in its investment banking division. "I've had all of the fun I can stand in investment banking at the moment," he told analysts.
[edit] Investment management
Global Wealth and Investment Management manages assets of institutions and individuals. It is among the 10 largest U.S. wealth managers (ranked by private banking assets under management in accounts of $1 million or more as of June 30, 2005). In July 2006, Chairman Ken Lewis announced that GWIM's total assets under management exceeded $500 billion. GWIM has five primary lines of business: Premier Banking & Investments (including Bank of America Investment Services, Inc.), The Private Bank, Family Wealth Advisors, Columbia Management Group, and Banc of America Specialist.
Bank of America has recently spent $675 million building its US investment banking business and is looking to become one of the top five investment banks worldwide. "Bank of America already has excellent relationships with the corporate and financial institutions world. Its clients include 98% of the Fortune 500 companies in the US and 79% of the Global Fortune 500. These relationships, as well as a balance sheet that most banks would kill for, are the foundations for a lofty ambition."[19]
Bank of America is currently constructing a massive new headquarters for its New York City operations. The skyscaper will be located on 42nd Street and Avenue of the Americas, at Bryant Park, and will feature state of the art, environmentally-friendly technology throughout its 1.2 million square feet (111,484 m²) of office space. The building will be the headquarters for the company's investment banking division, and will also host most of Bank of America's New York-based staff.
[edit] International operations
In 2005, Bank of America acquired a 9% stake in China Construction Bank, China's second largest bank, for $3 billion.[20] It represented the company's largest foray into China's growing banking sector. Bank of America currently has offices in Hong Kong, Shanghai, and Guangzhou and is looking to greatly expand its Chinese business as a result of this deal.
Bank of America has invested in India as an emerging market. Currently, Bank of America maintains branches in Mumbai, Chennai, Calcutta, New Delhi and Bangalore. For the fiscal year ending March 31, 2006 Bank of America reported an 80% increase in net profit.[21]
Bank of America operated under the name BankBoston in many other Latin American countries, including Brazil. In 2006, Bank of America sold all BankBoston's operations to Brazilian bank Banco Itaú, in exchange for Itaú shares. The BankBoston name and trademarks were not part of the transaction and, as part of the sale agreement, cannot be used by Bank of America. (That meant the extinction of the BankBoston brand.)
Bank of America's Global Corporate and Investment Banking spans the Globe with divisions in United States, Europe and Asia. The U.S. headquarters are located in New York, European headquarters are based in London and Asia's headquarters are split between Singapore & Hong Kong.
BY:-ANAND SHANKAR
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