Bank of America Corp. is becoming an aggressive competitor in the loan syndication market and is giving the traditional pace-setter, Chase Manhattan Corp., a run for its money. BofA pulled off a coup in the third quarter when it narrowly edged out Chase as the leading manager of U.S. syndicated loans. BofA's total was $90.166 billion, a mere $34 million more than Chase's $90.132 billion.Bank of America and Chase clearly dominate the loan syndication market. The two controlled more than 55% of the market in the year ended Sept. 30. Salomon Smith Barney, Citigroup's investment banking unit, came in a distant third, with $9.8 billion in loan syndications under its belt, followed by Bank One, with $5.3 billion. Sharon Tucker, a Bank of America spokeswoman, said the company has targeted syndicated lending as a growth area within its investment banking activities. Despite a 15% drop in third-quarter 2000 net income, Bank of America's investment banking unit's income rose 4% to $376 million. Syndicated lending and advisory services accounted for $219 million of investment banking revenue, or 60% of the third quarter investment banking income.
BofA has been narrowing the gap in the syndicated lending rankings since the start of the year. In the first and second quarters, it was beaten out by Chase. Chase managed $78.96 billion of loans in the first quarter, compared with $49.7 billion for Bank of America. In the second quarter, Chase syndicated $123.7 billion in loans, versus $79.4 billion for BofA. But in the third quarter, Chase's syndications dropped sharply to $90.132 billion, while Bank of America's rose to $90.166 billion.