NEW YORK, Jan 1: Bank of America Corp completed its purchase of Merrill Lynch & Co and Wells Fargo & Co finished buying Wachovia Corp, the latest sea changes in a transformed banking industry facing dire economic times ahead.

The Merrill takeover was completed on Thursday, ending more than 94 years of independence for the Wall Street investment bank and brokerage. The Wachovia merger closed on Wednesday, marking the denouement for a lender that started in 1879 with what it deemed a “very adequate” $100,000 of capital.

Bank of America has said it would issue about 1.71 billion common shares to buy Merrill, equal to about $24.1 billion, plus 359,100 preferred shares. The Wachovia merger valued that bank at roughly $12.7 billion.

By adding Merrill, Bank of America vaulted over JPMorgan Chase & Co and Citigroup Inc to become the largest US bank by assets, with about $2.7 trillion. Wells Fargo ranks fourth, with about $1.4 trillion. Bank of America and Wells Fargo are also the largest US mortgage providers.

The mergers follow a year that saw several major US financial providers find buyers, fail, or adopt new business structures amid the biggest financial crisis in decades, prompting the US Treasury Department to craft the $700 billion Troubled Asset Relief Programme to bail out the industry.

A year-long US recession has caused banks’ credit problems to soar. Economists believe the US economy shrank as much as six per cent in the fourth quarter and could decline at least through June, and expect the unemployment rate to soar well above eight per cent in 2009, up from November’s 6.7 per cent.

Merrill and Wachovia together suffered more than $48 billion of losses from January to September, largely because of writedowns tied to mortgages and other troubled debt.

Another big lender hurt by mortgage losses, Cleveland’s National City Corp, was acquired on Wednesday by Pittsburgh-based PNC Financial Services Group Inc for about $3.9 billion, based on reported common shares.—Reuters