SAN FRANCISCO — Bank of America, the nation's second-largest bank, has formally banned any new loans to South African borrowers because of apartheid, that nation's policy of enforced segregation.
"We believe that prosperity and stability cannot return to South Africa while the apartheid system remains," the bank's management wrote in a statement in its June 10 employee newsletter.
"Taking into account not only the credit risk apparent in South Africa but also our abhorrence of apartheid, we will not make new loans to borrowers in South Africa as long as the apartheid system exists," the statement said.
The ban is somewhat of a policy reversal for the bank's management, which just two months ago opposed a shareholder resolution calling for the San Francisco-based bank to end its dealings with South Africa. That resolution, introduced by four religious organizations, was defeated by stockholders. Shareholders have voted down resolutions to impose a moratorium on new lending to South Africa five times in the past eight years.