Bankamerica Widens Its Horizons

The BankAmerica Corporation’s roots are unusual for a major bank. Shortly after the turn of the century, its founder, a successful young executive named A.P. Giannini, became a member of the board of directors of a savings and loan in the North Beach area of San Francisco. A.P. soon ran into difficulty when he tried to convince the other directors to extend banking services to everyone, not just the relatively rich. Rebuffed, he left the board and started his own bank, the Bank of America, which Giannini referred to as the “Bank of the Little People”.Giannini’s idea of banking included many innovations, such as advertising, having bank officers sit in the lobby to help customers, and pioneering time-plan loans. By 1940, 1 out of every 3 Californians was a Bank of America customer. When Giannini died in 1949, he left behind a legacy of visionary leadership and human concern.The next few decades were characterized by heavy regulation in the banking industry, and the organizational culture at the Bank of America gradually changed. During the 1970s the Bank of America emerged as the BankAmerica Corporation. Under A.W. Clausen, a CEO whose authoritarian ways earned him the title “the dictator”, BankAmerica became the most profitable banking company in the country. When Clausen left in 1981 to head the World Bank, BankAmerica looked great on paper. Yet critics argued that Clausen had made too many high-risk loans, spent virtually nothing on new technology such as automated teller machines, and allowed BankAmerica to become the most undercapitalized major bank in the country.