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Bank of America in £28bn swoop

13 April 2012

MERGER mania is set to make a comeback after it emerged today that Bank of America, the largest retail bank in the US, is set to reveal a $47bn (£27.8bn) deal with FleetBoston Financial.

The deal would be the largest single corporate transaction to be announced this year and could fuel more such activity.

Bank of America, touted as a bidder for Barclays, is likely to pay $45 a share for Fleet in an all-paper deal, according to a report in today's Boston Globe. BoA is now likely to shelve its European plans.

News of the expected merger comes against a background of soaring bank profits, thanks to low interest rates, dwindling debt provisions and strong demand for consumer loans.

Boston, America's seventh-largest bank, recently reported a 17% rise in third-quarter earnings against a 30% surge at BoA, led by chief executive Kenneth Lewis.

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