BankBoston
| File:Bank Boston.png | |
| Industry | Bank holding company |
|---|---|
| Predecessor | Bank of Boston BayBank |
| Founded | Template:Sda (originally Massachusetts Bank) |
| Defunct | October 1, 1999 |
| Successor | FleetBoston Financial |
| Headquarters | Boston, Massachusetts, United States |
| Products | Financial services |
BankBoston was a financial institution headquartered in Boston, Massachusetts, established through the 1996 consolidation of Bank of Boston and BayBank. Although its roots extend back to 1784, the merged organization existed briefly before being acquired by FleetBoston Financial in 1999. Subsequently, FleetBoston was absorbed by Bank of America in 2005.
After divesting its Latin American operations in 2006, BankBoston currently functions exclusively as a private banking subsidiary within Bank of America.
History
The evolution of BankBoston encompasses the amalgamation of several New England banking entities over a span of two centuries, including the Massachusetts Bank, First National Bank of Boston, Old Colony Trust Company, and BayBank.
The Massachusetts Bank
The foundation of Bank of Boston traces to The Massachusetts Bank, established in 1784 as the first federally chartered joint-stock bank in the United States and second overall after the Bank of North America. Its charter bore the signature of John Hancock, with notable early patrons such as Paul Revere, Samuel Adams, and Henry Knox. Created primarily by merchants seeking a U.S. institution to facilitate international trade, its initial offices were located near Boston Common.
Until 1792, it was Boston’s only bank, until the Union Bank (which later became the Bank of New England) was founded. The bank played a pioneering role in financing the first U.S. trade mission to China in 1786 and supported the earliest American expedition to Argentina in 1791, establishing a foundation for its substantial presence in Latin American markets. Over time, it grew to become the leading foreign bank in several key Latin American countries.
In 1864, The Massachusetts Bank adopted the name Massachusetts National Bank.
First National Bank of Boston
In 1903, The Massachusetts Bank merged with The First National Bank of Boston—originally established in 1859 as Safety Fund Bank and renamed upon joining the national banking system in 1864. After operating briefly under the name The Massachusetts First National Bank of Boston, it dropped "Massachusetts" from its title within a year.
On December 24, 1927, the Buenos Aires branch of Bank of Boston was targeted and bombed by Italian anarchist Severino Di Giovanni amid international demonstrations supporting Sacco and Vanzetti.
Despite challenges following the 1929 stock market collapse, First National Bank of Boston expanded by acquiring Old Colony Trust Company. However, due to the Glass–Steagall Act enacted in 1933, it was compelled to separate its investment banking division, which became First Boston Corporation.
In 1970, the institution restructured under a holding company named First National Boston Corporation and embarked on regional acquisitions throughout the subsequent two decades. A significant legal victory occurred in 1978 when it successfully contested Massachusetts’ restrictions on corporate political donations in First National Bank of Boston v. Bellotti. The bank adopted the name Bank of Boston in 1982 and proceeded to acquire Connecticut-based Colonial Bancorp in 1985 as well as Vermont’s BankVermont Corporation in 1987.
Acquisition of BayBank and the Formation of BankBoston
During the 1990s, Bank of Boston pursued growth primarily through acquisitions to prevent becoming a takeover target itself. It lost the 1991 contest for the failed Bank of New England to Fleet Bank and experienced a failed merger attempt with Shawmut Bank in 1992. Negotiations with Fleet in 1994 ended without agreement when Fleet merged with Shawmut in 1995, creating the largest bank in New England.
In 1995, Bank of Boston combined with BayBank, a prominent retail banking institution boasting 205 branches and more than a thousand ATMs. BayBank traced its origins to Old Colony Trust, established in 1928, which evolved into Baystate Corporation as it expanded throughout Massachusetts. Through aggressive acquisitions during the mid-20th century, BayBank grew to generate approximately 80% of its revenue from retail banking and served nearly one-third of households in eastern Massachusetts.
Following this merger, Bank of Boston regained its position as Boston’s largest bank, surpassing Fleet locally but still trailing in overall size. Incorporating BayBank’s $11 billion in assets elevated total assets beyond $62 billion by the close of 1996.
The merged entity was rebranded as BankBoston in 1996, establishing itself as a significant player domestically and internationally, particularly leveraging its Latin American operations that retained the original name. Nonetheless, it soon became part of the broader wave of U.S. banking consolidations during the late 1990s.
In August 1998, BankBoston acquired Robertson Stephens & Co. from BankAmerica Corporation for approximately $800 million, marking its second-largest purchase after BayBank.
Bank of New York Partnership
On October 26, 1999, Bank of New York designated BankBoston Panama as its subcustodian bank for Panama. Founded in 1973, BankBoston Panama had been providing custody services to non-resident investors starting in 1996.
Merger with Fleet
Fleet Bank, headquartered in Boston and established originally as Providence Bank in 1791, acquired BankBoston in 1999 after previously absorbing Shawmut Bank. While Fleet dominated New England’s banking market, it maintained the BankBoston brand for Latin American operations. This merger resulted in the formation of the eighth-largest bank in the United States, with assets exceeding $190 billion. By the late 1990s, this combined institution had integrated eight out of New England’s ten largest banks.
The new organization, known as FleetBoston Financial, adopted BankBoston’s headquarters in Boston and operated branches across New England and the mid-Atlantic region. In 2000, FleetBoston expanded further by acquiring Summit Bancorp based in Princeton, New Jersey, which provided them with leading market share within the state and substantial growth within the Philadelphia metropolitan area.
Acquisition by Bank of America
In 2004, Bank of America purchased FleetBoston to enhance its presence along the East Coast. To concentrate on domestic expansion, Bank of America divested the Latin American assets still operating under the BankBoston name.
On December 17, 2004, Bank of America sold BankBoston’s operations in Peru, Colombia, and Panama to Banco General, a Panamanian private equity bank with offices and correspondent relationships throughout Latin America and connections to major global banks.
In 2006, all Brazilian assets under BankBoston were sold to Banco Itaú in exchange for shares; notably, the deal excluded rights to use the BankBoston name by Bank of America. Later that year Itaú also acquired BankBoston assets located in Chile and Uruguay and continued operating under the BankBoston brand until fully integrating these businesses by early 2007.
In December 2006, Argentina’s central bank approved the sale of BankBoston Argentina to South Africa’s Standard Bank. The transaction was finalized in April 2007, ending use of the BankBoston brand within Argentina. Subsequently, Standard Bank sold an 80% interest to Industrial and Commercial Bank of China in 2012.
Currently, the BankBoston name survives exclusively as an international private banking subsidiary owned by Bank of America.