From bust to bounce-back. (Bank of America)
Economist (US), The, April, 1989
From bust to bounce-back
TWO years ago Bank of America (BA) was on its way to the knacker's yard. Loan losses were wearing out its capital; top executives were leaving; and it faced a hostile takeover bid. Since then, America's third largest commercial bank has staged such a strong recovery that it is now hard to find a Wall Street bank analyst who is not convinced that the turnaround is for real.
The trigger for the change came in October 1986 when a Los Angeles rival, First Interstate, launched a close-run $3.4 billion bid. That jolted San Francisco's BA into reorganising its business after a decade of disasters.
The turnaround has been led by Mr Tom Clausen, the bank's former chairman of the 1970s. He returned (controversially, after an...
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