Finance: Bankamerica’s Fund Raising

Having lost a staggering $640 million in the second quarter, BankAmerica is in the midst of an all-points campaign to cut costs and raise cash. The San Francisco-based giant (assets: $117.3 billion) has laid off 6.3% of its 80,000 employees this year, and last week it finalized the sale of its carleasing subsidiary to General Electric Credit for some $215 million. BankAmerica’s main unit, Bank of America, completed a two-day auction that was billed as the largest farmland sale in California history. The bank put 3,821 fertile acres in the state’s Central Valley on the block as a start at unloading 214,000 acres of land that the bank has unwillingly accumulated by foreclosing on bad agricultural loans.

The auction, held at motels in Fresno one day and Sacramento the next, attracted overflow crowds of farmers and agribusinessmen, but the results were something of a letdown for BankAmerica. Successful bidders paid only 76% of the appraised value of the land on average, and six of 23 parcels went unsold because no one was willing to make the minimum bids that had been set. The $3.8 million raised by the auction was “less money than we had hoped for,” admitted BankAmerica Vice President H.G. Weichert. But at his institution these days, every little bit helps.