Bank Will Close 10 to 15 Offices : B of A Cuts Back in Latin America

Bank of America said Thursday that it will substantially reduce its operations in Latin America as part of a global retrenchment.

But the nation’s largest bank stressed that it is not pulling out of the region, although it plans to close 10 to 15 of its 34 Latin American offices. It also owns an Argentine subsidiary bank, Bank of America S.A., with 65 branches.

The move is part of a larger strategy to trim unprofitable operations from the bank’s world banking division. The region covering Latin America and the Caribbean has been B of A’s least profitable over the past several years.

After the 10 to 15 offices are pared from the bank’s Latin operations, B of A will have only about half as many total units in the region as it had at its peak in 1981.

Worldwide, the bank has closed 76 offices and sold interests in 30 affiliates during a three-year restructuring. Total employment has fallen about 10%, and further job reductions are expected to be announced next week.

BankAmerica, the bank’s parent firm, last week reported a second-quarter loss of $338 million, the second-largest quarterly loss in U.S. banking history. It blamed the deficit on loan losses in nearly every part of the bank’s far-flung customer network.

Ongoing Restructuring

“Bank of America has been restructuring its operations for the past three years,” the company said in a statement Thursday. “It is an ongoing process and a necessary one in this era of deregulation of the financial-services industry.”

B of A has been one of the chief U.S. lenders to Latin America and thus was hit hard when loans to such nations as Brazil, Bolivia, Mexico and Nicaragua went sour. B of A was at greater risk than many other U.S. banks because it loaned heavily to small and medium-size private businesses rather than governments. The government, or “sovereign,” loans are being renegotiated, while banks are being forced to write off substantial portions of their private-sector loan portfolios.

Separately, the bank said it was involved in “discussions” with U.S. Treasury officials regarding the possibility of penalties for failure to file cash transaction reports. B of A had previously acknowledged an unspecified number of violations of a federal law requiring that all cash transactions over $10,000 be reported to the IRS.

A Treasury spokesman said he was not aware of any imminent action against B of A.