NEW YORK -- Bank of America Corp. briefly surpassed longtime leader Citigroup Inc. as the world's largest bank by market value yesterday, though by the end of the day Citigroup had reclaimed its crown.
``It reflects investors' preference for a growth story," said Jim Russell, of Fifth Third Asset Management in Cincinnati. ``Bank of America seems to be hitting on all cylinders domestically. In contrast, Citigroup has run into growth bumps that are taking longer to fix than many investors would like."
Being bypassed is not a definitive gauge of Citigroup's long-term prospects, but might be a blow for a bank that prides itself on its size and reach in more than 100 countries. Bank of America's market value topped Citigroup's several times yesterday. By yesterday's close, Citigroup had regained its lead over Bank of America in market capitalization, $238.8 billion to $235.6 billion.
Citigroup remains the biggest US bank by assets, a traditional measure of size, with $1.63 trillion, compared with Bank of America's $1.45 trillion.
Last week, Britain's HSBC Holdings PLC said it had become the world's biggest bank by assets, with $1.74 trillion.
Bank of America's chief executive, Kenneth Lewis, has emphasized growth in the United States, especially through acquisitions such as of FleetBoston Financial Corp. and credit card issuer MBNA Corp., which together cost about $82 billion.
Adding MBNA turned Bank of America into the biggest US credit card issuer. The bank also operates some 5,800 US branches, six times as many as Citigroup, and controls 10 percent of US deposits.
Citigroup's chief executive, Charles Prince, has focused on ``organic" growth, especially internationally, but has struggled to keep costs down.
Citigroup stock is up 6 percent since Prince became CEO at the end of September 2003; Bank of America shares are up 33 percent.