Bank of America Essay Example | Topics and Well Written Essays - 500 words

Bank of America - Essay Example Up to that point, this was the largest acquisition deal in the banking sector. After the acquisition by Nations Bank of Bank America, the Bank of America emerged and, while it was technically an acquisition, this deal had a structure similar to that of a merger (James & James 34). After the Chairman and CEO of the Bank of America Hugh McColl resigned, his successor Ken Lewis focused the bank’s attentions on efficiency and financial discipline, which was in contrast to earlier expansionary acquisition and merger strategies pursued by McColl. However, in 2004, the Bank of America acquired the National Processing Company from National Corp for some $1.4 billion, renaming it BA Merchant Services (James & James 37). National Processing Company was at the time engaged in the processing of MasterCard and VISA transactions. As a result of this acquisition, this company now processed at least one in every six MasterCard and VISA transactions, while also expanding the Bank of America’s share of the financial solutions market, especially for healthcare and travel companies. In addition, the bank also acquired FleetBoston Financial in 2004 for some $47 billion, which was aimed at aiding the Bank of America to attain market share in the United States’ northeastern region (James & James 38). This solidified its position as the bank in the United States with the highest FDIC-rated deposit market share with over $513 billion in deposits. This placed well the Bank of America ahead of JP Morgan Chase-Bank One and Wells Fargo & Co, which had deposits of $353 billion and $228 billion respectively as of the year 2003 (James & James 39). The Bank of America also announced the acquisition of MBNA, a credit card giant, for $35 billion in stocks and cash. This deal was given the final approval in December of 2005 by the Federal Reserve Board, which gave the green