I worked at Wachovia Corporation (NYSE:WB)'s predecessor, First Union, in the heady early years of banking consolidation. My boyfriend at the time worked for the cross-town rival, NationsBank, now Bank of America Corporation (NYSE:BAC). Our bosses were married, coincidentally, so we got lots of peaks into the personalities behind some of the biggest banks in the country. At the time, I was in Loan Syndications, meaning that each month brought a new opportunity to meet & greet the local frontliners in all the world's banks -- and every time a new bank acquisition came across the pike, we had both one fewer contact and instant access into merger scuttlebutt.Let's just say that, when I read in the Chicago Tribune about the Morgan Stanley report claiming that both Bank of America and Citigroup Inc. (NYSE:C) were leading takeover targets, I said (much like blogger Ticker Sense), what the flip? Hardly. Not only, as Ticker Sense points out, are Bank of America and Citigroup the fourth- and fifth-largest companies in the country, and as a result: entirely too big to be bought out. But, also, it's just not in their corporate personalities. Hugh McColl, longtime CEO of Bank of America and, though he's retired, a manager whose spirit will always be redolent in the corporate decision-making, is a buyer, not a seller. He and his counterparts at Citigroup have been locked in a battle of one-ups-manship to secure the title of biggest bank in the nation for years, and neither would be likely to give up said title for a little (questionable, in the huge conglomerate that would result from any acquisition) value for shareholders.
There's going to be no takeover here, not with Bank of America or Citigroup at the short end of the stick. Maybe the two company's stocks are cheap (Bank of America closed today at $54.56, a decline of 7 cents and only a dollar away from its 52-week high; while Citigroup closed at $50.31, a $0.46 decline, and also about a dollar away from 52-week high), but that says "buying opportunity" to me, not "takeover target."
Want to buy a buyout possibility? Now Wachovia ... that's a possibility.
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Reader Comments (Page 1 of 1)
11-25-2006 @ 11:40AM
Nick said...
Big boys are nasty Gov shu be the only big boy and serving its people not politicians,corporations and other self serving jackass greeds.
11-26-2006 @ 1:53AM
Susan said...
I agree totally about the BIG BOYS! I have delt with both banks mentioned and as a consumer I feel they make alot of money off the average wage earners. They charge fees for everything just to make money. I do feel they would not merge anytime soon. Individually, they prosper and do not need each other. We should have the same concept and not deal with the fees and go to credit unions where you are treated as an owner of the finincial company. If more of the average person moved there funds into their own share account they would make more money and pay no fees. Think about it, these BIG BOYS wouldn't be so LARGE and would need each other.They would need us too! NO FEES PLEASE!
11-26-2006 @ 1:30PM
Shawn704 said...
Take over by what? Other banks, foreign banks? Bank of America cannot be bought out by any other banks, it's the only bank in the US that is has reached the Fed's cap on deposits of 10% of the total deposits in the US.
11-26-2006 @ 2:45PM
Joe Banker said...
Let me first say one thing. Bank of America over the years has made people very uneasy about banking. They have made up their own rules as they got bigger. When I tried to cash a check drawn on a branch of BOA I was told I would have to stick my thumb on an ink pad and then place it on the check. When I asked for something in BLACK and WHITE from a regulartory agency they told me it was their rule. THe only rule is that when cashing a check you have to have some sort of picture ID issued by a government be it city state or federal. It almost came to a stand off with the local police. They were the first to initiate a fee for using their ATM's with another banks card even if they were on the same network which cause the other banks to do the same thing. When I moved to Florida in 2001 and tried to open a checking account with a check card option I was told because I had bad credit I could not open any kind of an account. Is this the kind of bank you want to do business with? I don't think so. I went down the road to the local Credit Union and opened an account with no questions asked. The only thing BOA is leading in anything is when it comes to outlandish fees for things other banks do or did for free. BOA started off as the Bank of Italy in California and was a friendly family type bank then became BOA. I refuse to do any business with them knowing that they are only out to rip you off and any time they can.
12-07-2006 @ 12:51PM
Roger Hummel said...
I have been with Bank of America since 1954 and I have heard people complain about B of A and other banks. Some may have had a good reason, but from what I heard, most complaints were caused by the people doing the complaining. The biggest companies always have the most customers who complain just about all the time because they are the easiest to pick on and when a big name is attached it makes a persons complaint sound bigger than a small name company.