Bank of America took the second-biggest hit of the Steinhoff International kerfuffle, a $292 million charge that was the highest of any bank that didn’t underwrite the $2 billion loan to the South African mattress company’s then-chairman. He used the loan, which was backed by his shares in Steinhoff, to buy more shares in Steinhoff, which really left BofA (and basically everyone else) in a bit of a bind after the value of those shares plummeted in the wake of accounting irregularities at Steinhoff.
You might think that this was a painful moment to just try to forget about. As essentially every bank on Wall Street got taken in, you could say that the loss was in its way unavoidable, that if due diligence was going to uncover a red flag, someone’s would have. But no: In spite of all of the very great evidence to the contrary, Brian Moynihan & co. think they are smarter than everyone else, or at least should have been. Also, they’ve got some extra money to spend on lawyers these days.
Bank of America Corp. has brought in an outside law firm to help examine a soured lending arrangement that led to a $292 million charge in last year’s fourth quarter, according to people familiar with the matter….
“One of the reasons we have record-low credit losses is because we take the time to analyze what happened when things don’t go as planned and learn from it. It’s the responsible thing for a financial institution to do,” a bank spokesman said.