The U.S. banking sector started 2009 with big changes
| Date: January 3, 2009 | Source: Reuters |
| Category: Business | |
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Loading ... The U.S. banking sector yesterday opened the new year stock with major structural changes due to the crisis experienced in 2008 and closed three major operations: the purchase of Merrill Lynch, Wachovia and National City by Bank of America, Wells Fargo and PNC, respectively.
These three purchases, which were generated in the second half of 2008 - the worst stock market year since the Great Depression - was officially closed with the arrival of the new year.
Thus, Bank of America , which in 2008 fell more than 65% stock, is now the largest U.S. bank after the takeover of investment bank Merrill Lynch , with about 2,700 million dollars in assets and headquarters in Charlotte, North Carolina.
The operation, which was initially valued at 50,000 million dollars, ended nearly a century of Merrill Lynch as an independent entity. It also included the purchase of 50% that the investment bank had in the fund manager BlackRock.
Merrill agreed to be bought by the bank last September to avoid a similar fate to that of Lehman Brothers , almost simultaneously, had to file for bankruptcy by failing to find an entity willing to purchase.
Bank of America , which plans to eliminate up to 35,000 jobs as a result of the absorption of Merrill Lynch , has more than 59 million customers, 6,100 branches and 18,000 ATMs spread across the country, plus a service online with more than 25 million active users.
It serves customers in over 150 countries and has trade links with 99% of companies in the Fortune 500.
Shortly after the start of the first trading session of the year, shares of Bank of America fell nearly 2% and traded at $ 13.8, compared to more than $ 40 which was trading for twelve months.
After a struggle which also came into play Citigroup finally Wells Fargo , based in California, agreed in October to acquire Wachovia, which was on the verge of bankruptcy.
After completing the transaction, amounting to 12,700 million at the turn of the year Wells Fargo has the largest branch network in the country (11,000) and has doubled its size.
It is also the second biggest U.S. bank by deposits, with 774,000 million, and the fourth by assets, with 1,400 million dollars, according to its own data, while the second-largest mortgage lender in the country.
In the first year's trading session, shares of Wells Fargo fell 1.4% shortly after the opening of the New York Stock Exchange and traded at $ 29.1, a price similar to a year ago.
Meanwhile, PNC Financial Services has positioned itself as the fifth country's bank by assets after the acquisition of National City.
Their titles, however, also opened lower despite the upward trend of the overall market, and shortly after the opening descended by 2.5% to $ 47.8. Titles in one year have fallen more than 26%.
These operations are added to others of great importance gestated in 2008 before the ravages of the financial crisis that have reshaped the landscape of American banking.
Among them, the investment bank JP Morgan Chase bought Bear Stearns to its competitor and Banking Washington Mutual (which filed for bankruptcy), then take the necessary steps to transform it into a commercial bank.
In addition, Bank of America bought Countrywide and Barclays bought part of the assets of Lehman Brothers, also in bankruptcy and a situation that was also doomed the bank IndyMac, while others announced multibillion-dollar losses, drastic spending cuts and thousands of layoffs.
