BANK OF AMERICA
&
WELLS FARGO
ROSS BABINEC
ELLEN DALE
LAUREN FACTOR
CORPORATE ADDRESS
100 North Tryon Street
Charlotte, NC 28255
420 Montgomery Street
San Francisco, CA 94104
BANK OF AMERICA
MARKET SHARE: 11.8%
• Headquartered in Charlotte, NC
• World’s largest holding-backed company in terms
of assets and revenue
• In the next five years, revenue is forecasted to
increase by 10% annually to $67.1 billion
• Like most banks in the industry it was hit hard by the
recession
• Operates through three business segments: Global
consumer and small business banking(GC&SBB),
global corporate and investment banking, and
global wealth and investment management
BANK OF AMERICA CONT.
• GC&SBB is most relevant to the Commercial
Banking Industry, and is the source of 80% of its
revenue
• Within the GC&SBB segment there are four primary
businesses
•
•
•
•
Deposits
Card Services
Consumer Real Estate
Asset Liability Management
WELLS FARGO
MARKET SHARE: 11.3%
• Headquartered in San Francisco, CA
• Diversified financial services company that provides
banking, insurance, investment, mortgage and
consumer finance
• Separated into three main segments
• Community Banking
• Wholesale Banking
• Wells Fargo Financial
• Largest business segment is commercial banking
generating more than 80% of its revenue
WELLS FARGO CONT.
• Community banking business serves small-business
clients as well as retail customers and high net worth
individuals
• Provides a wide range of products ranging from home
mortgages and debit cards to personal trusts
• In 2008 Wells Fargo acquired Wachovia
• As a result, it became the nation’s largest mortgage lender
and the second-largest diversified service firm in the US in
terms of deposits
COMMERCIAL BANKING
• The industry comprises banks that provide financial
services to retail and business clients in the form of
commercial, industrial and consumer loans
• Banks also accept deposits from customers, which
are then used as a source of funding for the loans
COMMERCIAL BANKING CONT.
Primary Activities
• Receiving deposits
from customers and
issuing consumer,
commercial and
industrial loans
Major Products and Services
•
•
•
•
Business lending
Deposits
Home equity loans
Mortgages
EMPLOYMENT PROSPECTS
The Bureau of Labor Statistics
• The commercial banking industry employs approximately
1,332,000 wage and salary workers in 2008, which is 74 percent
of total banking industry.
• Most bank employees work in heavily populated States such as
New York, California, Illinois, North Carolina, Pennsylvania, and
Texas.
• Increase in American’s wealth and investments, along with the
increase in local branch banking.
• Need for skilled workers in areas with high employee turnover.
EMPLOYMENT PROSPECTS CONT.
IBISWorld
• A positive, however small, increase in employment growth.
• Troubled Asset Relief Program.
• Average rate of revenue increase over five years is
approximately 5.5% .
RETURN ON EQUITY
(PERCENTAGE)
Wells Fargo
18
16
14
12
10
8
6
4
2
0
-2
2006 2007 2008 2009 2010
Bank of America
18
16
14
12
10
8
6
4
2
0
-2
2006 2007 2008 2009 2010
STOCK PRICE
Wells Fargo
Bank of America
$60.00
$60.00
$50.00
$50.00
$40.00
$40.00
$30.00
$30.00
$20.00
$20.00
$10.00
$10.00
2006 2007 2008 2009 2010
2006 2007 2008 2009 2010
TOTAL ASSETS
2.5
Bank of America
Millions
Millions
Wells Fargo
2
2.5
2
1.5
1.5
1
1
0.5
0.5
0
0
2006 2007 2008 2009 2010
2006 2007 2008 2009 2010
OPERATIONAL EFFICIENCY:
EFFICIENCY RATIO
(PERCENTAGE)
Wells Fargo
Bank of America
60
60
58
58
56
56
54
54
52
52
50
50
48
48
2006 2007 2008 2009 2010
2006 2007 2008 2009 2010
SHARE OF INDUSTRY VALUE
(PERCENTAGE)
Wells Fargo
Bank of America
12
12
10
10
8
8
6
6
4
4
2
2
0
0
2006 2007 2008 2009 2010
2006 2007 2008 2009 2010
SUMMARY OF RATIO’S
• In 2008 WF acquired Wachovia, and this significantly
increased its share of industry value and total assets,
but also caused a significant decrease in
operational efficiency and ROE only in 2008, and
was able to then significantly increase these
numbers to percentages higher than they had
been before the acquisition
• Bank of America’s stock price and ROE was hit hard
by the 2007 financial crises but BOA has slowly been
able to come back and redeem themselves since
2008 and has mostly seen positive growth in their
ratios
SOURCES
Bank of America Corporation. "Investor Relations Historical Price Look Up." Bank Of America. Bank
Of America Corporation, 30 Mar. 2011. Web. 30 Mar. 2011.
<http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irolstocklookup&t=HistQuote>.
"Information in the Career Guide to Industries." Bureau Of Labor Statistics. United States Department
Of Labor, 17 Dec. 2009. Web. 31 Mar. 2011.
<http://www.bls.gov/oco/cg/cgs027.htm#outlook>.
IBISWorld. "US Commerical Banking Industry Market Research Report." IBISWorld. IBISWorld, 2011.
Web. 30 Mar. 2011.
<http://www.ibisworld.com/industryus/Majorcompanies.aspx?indid=1288>.
Microsoft. "Bank of America Corp - Company Financial Statements (BAC):Interim Balance Sheet."
MSN Money. MSN, 2011. Web. 30 Mar. 2011.
<http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?lstStatement=Bala
nce&symbol=US%3aBAC&stmtView=Qtr>.
Microsoft. "Financial Results Wells Fargo & Co." MSN Money. MSN, 2011. Web. 30 Mar. 2011.
<http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?lstStatement=10Ye
arSummary&symbol=WFC>.
Morningstar. Morningstar, Inc., n.d. Web. 4 Apr. 2011. <http://www.morningstar.com/>.
Wells Fargo. "About Wells Fargo - Stock Price." BigCharts. Wells Fargo, 3 Mar. 2011. Web. 30 Mar.
2011. <http://www.bigcharts.com/custom/wellsfargo-com/wellsfargo.asp>.