Most improved bank
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Most improved bank

Awards for Excellence 2002

Bank of America

At a financial services conference in March an investor asked Ken Lewis whether he was considering making any acquisitions. Lewis, who had become CEO 11 months previously, gave a quick-witted response: "We've just eaten. We're not hungry."

That was just what investors wanted to hear. Today's Bank of America is the result of a series of smaller acquisitions and larger mergers undertaken in the 1990s by the old NationsBank, under former CEO Hugh McColl. The emphasis was on empire building, with three big acquisitions completed in the space of two years: Boatman's Bancshares in 1996, Barnett Banks in 1997 and BankAmerica in 1998. The bank also ventured into full-service investment banking by acquiring Montgomery Securities in 1997; within two years most of its rainmakers had left. Successful integration and customer service came a poor second to the pursuit of size. "From late 1998 to 2000 we were working on putting the banks together," says Lewis. "Then we made the decision to be customer-centric." As a result, says Prudential Securities analyst Mike Mayo, "the company destroyed more shareholder value [economic value analysis] between late 1998 and early 2001 than any other US bank".

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