BANKING : B of A Recovered Fully, Clausen Tells Holders

BankAmerica Chairman A. W. Clausen told shareholders Thursday that California’s largest banking company has recovered fully from record losses and is in a position to reassert its dominance in the western United States.

“The corporation has been turned around,” Clausen said at the annual meeting, held in Los Angeles for only the second time in the history of the San Francisco-based banking company. “We are profitable. A dividend has been reinstated. We are strongly back in our key markets. And we are off to an excellent start on 1989.”

The mood at the meeting was decidedly friendlier and more upbeat than in recent years, as the bank weathered stunning losses in 1985, 1986 and 1987. Clausen joked comfortably with shareholders during an hourlong question-and-answer session that was interrupted several times by applause.

In contrast to recent annual meetings of the parent of Bank of America, no one rose from the audience of about 900 to ask for Clausen’s resignation. One disgruntled shareholder who has filed a lawsuit against the bank over loans, however, said he hoped Clausen remained on the job long enough to go to court and jail.

The biggest applause came when Clausen compared the bank’s stock price to that of a year ago.

“Last year on this date, you could have bought a share of BankAmerica common stock for $10.37,” he said. “When the closing bell sounded on the floor of the New York Stock Exchange this afternoon, the price stood at $28.”

The turnaround in the bank’s stock reflected the strong financial performance turned in by BankAmerica in 1988, when its profit reached $726 million, contrasted with a loss of $955 million in 1987 and its record profit in the first quarter of this year.

Clausen used a series of slides to illustrate the bank’s steady progress in all key areas over the last 30 months, since he was brought out of retirement in October, 1986, to restore the bank’s financial health.

While he refused to forecast profit for 1989, Clausen told reporters before the meeting that the bank is strong enough that a shallow recession should not reduce its earnings.