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Bank of America

Money, Banking, and Financial Institutions @ Grand View University Spring 2013 with Professor Ryan Anderson
by

Janet Vu Nguyen

on 17 April 2013

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Transcript of Bank of America

Company Background & History Internal Company Analysis Environmental Analysis New Regulations
Fallout from the recession
Facing strong competition to sustain market share
Serious losses, miserable profits
Consolidation in financial services industry
Volatility in financial markets
Sub prime exposure
Slow expansion of mortgages after market decline Mortgage Fraud charges to recover money lost by Fannie and Freddie
Low consumer confidence
2013 make or break year
Signs of stability and strength
Pain from old loans
US Housing recovery builds momentum
China should lead emerging market growth
Hiring of Robert Sachs from UBS AG, Switzerland Expansion in international markets
Further consolidation in the banking industry
Countrywide and Merrill Lynch acquisitions
Wealth management and consumer banking
Focus on a leaner, stronger bank
Opportunity to increase domestic markets by acquisitions/increase consolidation in banking
Diversification towards non-banking services
Increasing customer wealth/trend in the direction of the investment after the financial crisis 2007-2010. Opportunities Industry & Competitor Analysis HSBC Barclays Wells Fargo Opened in 1865 in Hong Kong
Currently serve 58 million people worldwide in more than 80 countries
Total Assets total more than $2.6 billion
Total Liabilities total more than $2.5 billion Opened more than 300 years ago in London
Developed first cash machine in 1967…“Live made easier”
4750 branches throughout 50 countries
Acquired Lehman Brothers office space in N.Y. after they went under in 2008
Total Assets total over $2.4 billion
Total Liabilities total over $2.3 billion Henry Wells and William Fargo created Wells Fargo in 1852 to provide banking services in California
Employees at 270,000 and customers up to 70 million
Acquired Wachovia in 2008
Total Assets total $1.4 billion
Total Liabilities total $1.6 billion Bank of America Predecessor in 1784, Massachusetts Bank
B of A operates in the U.S. and 40+ countries
57 million customers and 5600 banking centers
Total Assets total $2.2 billion
Total Liabilities total $1.9 billion Company Financial Analysis Janelle Laugerman
Janet Vu Nguyen
Kerry Rule
Tyler Smith
Kyler Ludwig
Derek Nightser One of world’s largest financial institutions
Server of individual consumers, small & middle market businesses, and large corporations
Provides full range of banking, investing, asset management, and other financial and risk management services
Operates in both Americas, Asia Pacific, the Middle East, and Africa
Headquartered in Charlotte, North Carolina
Employs 282,000 Background Global Banking
Card Services
Global Wealth and Investment Management
All Other
Deposits
Global Commercial Banking
Consumer Real Estate Services 7 Business Segments History Roots go back to 19th Century
Numerous mergers and acquisitions
July 1999, merger between B of A and NationsBank
B of A purchased Merrill Lynch in 2009 Strengths Brand recognition
Part of both DJIA and S&P 500
Diverse asset allocation
Variety of services
Economies of Scale Inability to control expenses hurts profitability.
Only 10% of business is international.
Asset Quality
Frequent top executive shuffling Weaknesses Asset Allocation Global banking and markets
Card services
Global wealth and investment management
Deposits
Global commercial banking
Consumer real estate services Economy of Scale Retail banking covers approximately 80% of America
The company holds global Top 3 rankings in key capital markets areas.
Strong global presence
Bank of America holds top tier position in the world across equities, fixed income, rates, currencies and mortgages.
The company’s leading franchises give it scale benefits. HSBC Holdings plc (HBC) – NYSE. 14 April. 2013. Retrieved from http://finance.yahoo.com/q?s=HBC.
HSBC (2013). “About HSBC” 14 April. 2013. Retrieved from http://www.hsbc.com/about-hsbc. Barclays PLC (BCS) – NYSE. 14 April. 2013. Retrieved from http://finance.yahoo.com/q?s=BCS. Wells Fargo & Company (WFC) – NYSE. 14 April. 2013. Retrieved from http://finance.yahoo.com/q?s=WFC. Bank of America Corporation (BAC) – NYSE. 14 April. 2013. Retrieved from http://finance.yahoo.com/q?s=BAC.
Bank of America (2013). “Our Heritage” 14 April. 2013. Retrieved from http://about.bankofamerica.com/en-us/our-story/our-heritage.html#fbid=TYnHQrhl3-W SWOT Analysis of Bank of America Corporation. 10 April. 2013. Retrieved from http://mba-lectures.com/marketing/swot-analysis-marketing/1155/swot-analysis-of-bank-of-america.html SWOT Analysis of Bank of America Corporation. 10 April. 2013. Retrieved from http://mba-lectures.com/marketing/swot-analysis-marketing/1155/swot-analysis-of-bank-of-america.html SWOT analysis of Bank of America Corporation. 10 April. 2013. Retrieved from http://marketingmix.org/swot-analysis-of-bank-of-america-corporation/ SWOT analysis of Bank of America Corporation. 10 April. 2013. Retrieved from http://marketingmix.org/swot-analysis-of-bank-of-america-corporation/ Conclusion & Recommendations Threats Stock Symbol: BAC
P/E ratio: 49.12
EPS ratio: 0.25
Steady share prices since beginning of year Monthly Adjusted Closing Prices 1990-2013 Explore Additional Products and Services
International Expansion
Improve Global Strategy
Improve Wealth and Debt Management
Consumer and Mobile Banking
Full transcript