Meet Amadeo Giannini, the Italian man who built the Bank of America

Have you ever heard of a Man named Amadeo Giannini? Not many people have. He was only the man responsible for shaping modern banking as we know it today.
Modern day banking is quite different today from how it was back in the day when banks first started. The democratization of banking practices go as far back as the beginning of the last century, when banks were only interested in making deals with the wealthy. Not everyone had access to home mortgages, car loans, credit cards and personal saving accounts – just to name a few financial services invented by one visionary financier, A.P. Giannini. But who is he and where did he come from?
Modern day banking is about individual preferences: there is a financial product for every customer and lifestyle. Banking is now hassle-free and there are less restrictions than ever before. We can complete almost all of our transactions online or even open accounts without a signature. Immediate transactions can be made through our mobile phones, and getting a loan is only a fingerprint away.
Who was Amadeo Giannini?
The son of Italian immigrants, Amadeo Pietro Giannini was born in San Jose, California in 1970. His father had been fatally shot when Giannini was only 7 years old. When he turned 13, he left school to work at his stepfather’s produce business and later became a produce broker. At the age of 22, he married Florinda Agnes Cuneo, who was also born to Italian parents, and whose father owned a large share in Columbus Savings & Loan.
Giannini always avoided wealth, and quickly grew bored of business life. He was only 30 when he chose to retire. “When a man has more money than he needs, he’s a slave to his money.” – explained his choice.
Back then, he already had a comfortable income from his investments and had an interest in his stepfather’s company. Amadeo Giannini didn’t step out of the business game for too long though. After the death of his father-in-law, he became the director of the institute. He dealt with billion dollar businesses, yet he never got blinded by the money.
The will of Amadeo Giannini was to become the banker of ‘the little fellow’ and that’s what he did. Due to his humble beginnings, he trusted hard working, poor people. Despite his good intentions, his ideas weren’t convincing enough for the board of directors to support him as he had imagined. Giannini then decided to resign and sold his share of the company. With a few investors on his side, he started up his own bank. In 1904, Amadeo Giannini created the Bank of Italy.
Amadeo Giannini was the first to offer banking services to the blue collar worker and welcomed small borrowers. Not only did he loan money to them, but also encouraged them to deposit their money in his bank; at that time, they only had the choice to stow away their savings under their mattresses. He helped his customers with the lowest interest rates. The Bank of Italy offered conveniently late opening hours to accomodate the working schedule of the blue collars.
How Amadeo Giannini and the Bank of Italy rebuilt San Francisco
After the devastating earthquake of 1906, San Francisco was heavily dismantled. More than 80% of the city had been destroyed, most business and banking buildings had collapsed. Amadeo already had a sense of urgency before the fires blazed and burned everything, so he managed to save all the assets and records of his bank. He drove out of San Francisco in a wagon borrowed from his stepfather’s produce business, disguising the hidden vaults under layers of fruit.
Still San Francisco was in desperate need of money and the work to rebuild the city had to start instantly. Amadeo Giannini saw it as an opportunity and decided to set up his new office at North Beach straight away. His bank was fully operative again within only days of the catastrophe. Giannini quickly made a makeshift desk out of two beer barrels and a plank. He knew timing was priority even if things weren’t necessarily in perfect order or aesthetically pleasing. He beat his competitors to the finish line in terms of timing as most of their records were burned down into ashes. Because he was a fast thinker and was able to reinvent himself in a relatively quick manner he ended with a big advantage against his competitors.
Giannini started taking deposits and offering people credit so they could reestablish their lives. He also took a major role, in rebuilding the city itself. While other banks waited for better times (and better investments) before reopening, Amadeo had a different idea. He felt that the people, especially small business owners, could benefit from his fortune and help San Francisco slowly get back on its feet, so he chose not to keep his money idle, but instead to loan it and help rebuild the city and the people who had lost it.
Amadeo Giannini and the power of (bank) trust
In the aftermath of the catastrophe, Amadeo Giannini bankrolled trust to everyone. He believed in the people and proved to the people that had previously been labeled as credit risk were as trustworthy and likely to pay back the bank just as the wealthy were. He lent money to immigrants that were fully ignored by other banks, and he did that solely on a handshake and smile. Amadeo Giannini certainly knew how to broaden his client list. The Bank of Italy was actually the first to allow women to open and manage their own account, without the involvement of their husbands. He was definitely a man ahead of his time.
Giannini also pioneered branch banking. After studying the Canadian model, he was the first banker to open up multiple locations state-wide; The Bank of Italy also quickly expanded by buying up existing banks. In 1928, Bank of Italy merged with another bank, and this was the birth of the Bank of America, the largest commercial bank in the world. By 1945, Bank of America had nearly 500 branches in California alone, with assets for a Net worth of 5 Billion dollars.
In order to get closer to his clients and local community, Amadeo Giannini often visited his branches personally. He was famous for remembering every face and every employee – even the names of their children!
The most famous investments of Amadeo Giannini
Many projects have been financed and have benefited from the Bank of America taking a leap of faith. For instance, Amadeo Giannini financed Hollywood through the hardship of the Great Depression. He funded the movie industry when other bankers thought investments in films to be far too risky.
The Bank of America helped Walt Disney to produce the first ever hand-drawn full feature film ever, Snow White or a piece of “madness”, as many people would call it back then.
Thanks to a loan granted by Giannini, William Hewlett and David Packard finally gave the boost HP (or Hewlett-Packard) needed at the time, HP made oscilloscopes and they were operating from a garage. Little known fact: this garage is a registered landmark of California and marked the birthplace of the Silicon Valley.
When Amadeo Giannini passed away in 1949, his net worth was just as little as US$500.000. You might think that’s a meagre sum for the greatest Italian American banker of all time.
The truth is that every time Giannini’s fortune would exceed his imaginary limit, he would give the money away to education or charity. During the Great Depression, he took no salary. He never wanted to become greedy and deemed his integrity far more important. Giannini is certainly a man to aspire to not only as a business model but at the same time a humanitarian.
Two subjects that rarely go hand in hand, especially in today’s world where image and money seem to hold the most value.