BANKAMERICA; FINANCIAL GIANTS TO WED.Byline: Peter Sinton San Francisco Chronicle The San Francisco Chronicle was founded in 1865 as The Daily Dramatic Chronicle by teenage brothers Charles de Young and Michael H. de Young.[2] The paper grew along with San Francisco to become the largest circulation newspaper on the West Coast of the BankAmerica Corp. and NationsBank confirmed plans Monday to merge in a huge deal that will create the nation's largest bank. The combined financial colossus Colossus - (A huge and ancient statue on the Greek island of Rhodes). 1. He was born and raised in Bennettsville, S.C., and graduated from the University of North Carolina at Chapel Hill. , 62. BankAmerica CEO David Coulter, 50, will take the No. 2 job as president and will remain in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , which will become home base for the combined bank's corporate finance and global banking operations. The deal will expand BofA's branch network from 11 states to 22 and create the first coast-to-coast bank, serving 29 million households from Washington state to Florida, as well as 2 million business customers in 39 countries. The merger will create the nation's largest bank, with $570 billion in assets. Chase Manhattan is now No. 1 with $365 billion in assets. Citicorp is No. 3 with $311 billion, but it would become the nation's largest bank holding company with $697 billion in banking, insurance and brokerage assets if its merger with Travelers Group goes through. To remain competitive at home and around the world, banks and other financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. firms increasingly feel they must combine to cut costs, gain economies of scale and provide ``one-stop shopping'' to consumers and corporate clients. At the same time, Depression-era regulations that kept banks from crossing state lines and joining with other types of businesses are crumbling. ``What we are seeing is banks going where it makes economic sense rather than where regulators allowed them to go,'' said L. William Seidman L. William Seidman is an American economist and financial commentator. Born April, 29, 1921 in Grand Rapids, Michigan. Wife Sally Seidman. Six children. Seidman received his undergraduate education at Dartmouth College, his law degree from Harvard University, and an , former chairman of the Federal Deposit Insurance Corp. ``I think these deals make sense.'' Also Monday, Banc One of Columbus, Ohio Columbus is the capital and the largest city of the American state of Ohio. Named for explorer Christopher Columbus, the city was founded in 1812 at the confluence of the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816. , agreed to buy First Chicago NBD NBD Next Business Day NBD National Bank of Dubai (United Arab Emirates) NBD No Big Deal NBD Network Block Device (Linux) NBD Nucleotide Binding Domain NBD New Business Development Corp. in a $30 billion stock deal that creates the nation's fifth-largest bank and the largest in the Midwest. Although BofA and NationsBank have some overlapping branches in Texas and New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , there is far less duplication than in ``in-state'' mergers like BankAmerica's purchase of Los Angeles-based Security Pacific Corp. in 1991 or Wells Fargo's acquisition of First Interstate two years ago. Nevertheless, Coulter and McColl said Monday at a news conference at the Waldorf Astoria Hotel in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of that they expect to cut 5,000 to 8,000 jobs over the next two years from their combined work force of 180,000. Total job reduction will be far more, since normal attrition in the banking industry runs about 18 percent per year. The banks declined to say where layoffs might occur. But the ranks of management as well as data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a and other back-office jobs are likely to be trimmed, analysts say. There also could be upheaval at investment banks The following is a list of investment banks Financial conglomerates Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. Montgomery Securities and Robertson, Stephens & Co., which last year were acquired by NationsBank and BofA, respectively. Historic rivals in the highly lucrative business of taking companies public, managers of these two entities might not take kindly to being put under the same corporate roof. The combined bank expects to cut costs by $1.3 billion a year by the end of next year and believes this should increase profits from a combined $6.2 billion last year to close to $10 billion by 2000. Investors applauded the news, driving both NationsBank and BankAmerica stock to record highs. BofA shares rose $4.63 to $91.13, giving the company a total market value of $62.4 billion. NationsBank shares rose $4.19 to $80, making the company worth $77.6 billion. But many customers who have lived through previous mergers are worried about falling service and rising fees. Under the terms of the merger agreement: BofA shareholders will receive 1.1316 shares of new BankAmerica stock for each share they now own, while NationsBank shareholders will get one for one. This exchange ratio was derived from the relative share price of both banks at the close of business Thursday, with no premium paid to either party. NationsBank will name 11 of 20 directors of the new board, which is in proportion to the market value of its shares in relation to BofA. The top six executive jobs were split between the two banks. While McColl was named CEO, Coulter is the current choice of directors to succeed him, perhaps by 2000, when McColl turns 65. NationsBank's James Hance, 53, was named vice chairman and chief financial officer of the combined bank, and Kenneth Lewis, 51, was named president of global retail (or consumer) banking. BofA's Michael Murray Michael Murray may refer to several people:
McColl and Coulter took pains to portray the friendly combination of BofA and NationsBank as ``a merger of equals.'' Still, some observers said the merger's terms were not quite equal. ``It hurts San Francisco to be losing the corporate headquarters of its major financial institution,'' said Bankers Trust analyst Joseph Morford. The announcement of the BankAmerica-NationsBank deal set off a new round of speculation Monday about the next merger. Wells Fargo shares shot up $18.81, or more than 5 percent, to another new high of $370.94 on continuing rumors that it could merge with U.S. Bancorp of Minneapolis. Several other potential financial merger targets also gained 4 percent or more: Mellon Bank jumped $3.94 to $73, J.P. Morgan rose $7.06 to $147.63 and Merrill Lynch was up $3.94 to $98.83. CAPTION(S): Map, 2 boxes Map: BankAmerica Daily News Box: (1) Top U.S. mergers (2) The Details |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion