Fed’s OK Clears Way for B of A-NationsBank Merger

A $60-billion mega-merger of BankAmerica Corp. and NationsBank Corp., creating the largest bank in the United States, won final regulatory approval Monday from the Federal Reserve Board.

The merger, announced in April and approved by a 6-0 vote at a closed meeting of the Fed, would vault the combined bank ahead of the nation’s two largest: Citicorp and Chase Manhattan Corp.

With 4,800 branch offices in 27 states and assets of $580 billion, it would become the third-largest bank in the world.

An even larger merger, still pending, would combine Citicorp and Travelers Group.

The Justice Department’s antitrust division approved the combination of BankAmerica, headquartered in San Francisco, and NationsBank, based in Charlotte, N.C., Friday. It required that the companies sell 17 New Mexico branches to maintain local market competition. The Fed also made that a requirement of its approval.

The merged company would be called BankAmerica Corp. Its operations, including 14,000 automated teller machines, would stretch from Alaska to California along the West Coast, east to Florida and north to Illinois and New York. It would control 8 cents of every dollar deposited in U.S. banks and savings institutions.

Since the merger was announced April 13, the Fed had been collecting comments from more than 1,600 organizations and individuals and conducted a two-day public hearing in San Francisco.

Many expressed concern about the impact on lending to minorities and to people in poor urban neighborhoods and rural communities. A community activist in North Carolina started a hunger strike.

But at a Senate hearing in June, Fed Chairman Alan Greenspan said that while the wave of bank mergers has reduced the number of banks nationally, it had not had a big impact on competition in individual markets.

The boards of the two banks are set to approve the merger Sept. 23.