Parmalat a large jolt to Bank of America

The Leckey File

Your Money

May 02, 2004|By Andrew Leckey

Bank of America once was based in San Francisco with the name Bank of Italy because founder Amadeo Peter Giannini catered to small farmers of Italian descent. After the city's 1906 earthquake, the dynamic and courageous Giannini helped finance its rebuilding.

To suit his larger vision, he renamed his institution Bank of America.

Now the bank with that name, based in Charlotte, N.C., and the product of numerous mergers, is writing off more than $100 million in loans to a dairy company based in Italy.

It's not just any dairy. Parmalat SpA is enmeshed in bankruptcy and an investigation of accounting procedures. Its extravagant chairman is under house arrest, and auditor Deloitte Touche stands accused of ignoring irregularities. Who knew dairies were such a risky business?

An embarrassed Bank of America is making up for its miscue, eliminating 12,500 jobs in its acquisition of FleetBoston Financial to indicate that it's nobody's fool. And its credit card business is up 17 percent this year.

It is performing better than analysts expected, with earnings up 11 percent in the first quarter. Still, it's a long road from helping the little guy to being taken by a fat cat.

Andrew Leckey is a Tribune Media Services columnist. E-mail him at yourmoney@

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