BoA-V7

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04 April 2011
Bank of America
Strategic Management Plan
April 17, 2014
Shane Theriault
Pierre-Oliver Lachance
Garik Theriault
Sierra Daigle
1
04 April 2011
Overview
Company Overview
Strategy Formulation
 Company History
 SWOT Matrix
 Existing Strategies
 IE Matrix
 Existing Mission and Vision
 Space Matrix
Proposed Mission and Vision
 Grand Strategy Matrix
External Assessment
 BCG Matrix
 Industry Analysis
 Matrix Analysis
 Organizational Chart
 QSPM Matrix
 Divisional Analysis
Strategy Implementation
 Opportunities and Threats
 Strategy
 EFE Matrix
 EPS/EBIT
 CPM Matrix
 Projected Financials
Internal Assessment
 Foreseeable Problems
 Organizational Structure
Evaluation
 Strengths and Weaknesses
 Balanced Score Card
 Financial Condition
Company Update
 IFE Matrix
2
04 April 2011
Company History – Bank of Italy
 1904 – Bank of Italy was founded in San Francisco by Amadeo Giannini for
immigrants who were denied service at other banks
 1906 – San Francisco earthquake
 1922 – Giannini established the Bank of America and Italy by buying Banca
dell'Italia Meridionale
 1927 – Giannini consolidated the 101 branches of the Bank of Italy with the
175 branches of the Liberty Bank of America to create the Bank of Italy
National Trust & Savings Association
 1928 – He merged with Bank of America, Los Angeles to become the largest
banking institution in the US
 1930 – Bank of Italy was renamed BankAmerica Corp. with Gianni and Orra E.
Monnette as co-chairs
3
04 April 2011
Company History Cont.
BankAmerica Corp.
 1953 – Clayton Antitrust Act & Bank Holding Company Act forced the
separation of BoA and Transamerica Corporation, an insurance subsidiary
 1953 – Banking regulators also force out of state activities into a new
company, First Interstate Bancorp, later acquired by Wells Fargo and
Company in 1996.
 1958 – Creation of BankAmericard (Later to be names Visa)
 1983 - Acquisition of Seafirst Corporation of Seattle, Washington, and its
wholly owned banking subsidiary, Seattle-First National Bank
 1992 – Acquired Security Pacific Corporation and its subsidiary Security Pacific
National Bank in California and other banks in Arizona, Idaho, Oregon, and
Washington which was the largest bank acquisition in history
 1992 - BankAmerica expanded into Nevada by acquiring Valley Bank of Nevada
 1994 - BankAmerica acquired the Continental Illinois National Bank and Trust
Co.
 1997 - BankAmerica acquired Robertson Stephens, a San Francisco-based
investment bank specializing in high technology
4
04 April 2011
Company History Cont.
Bank of America
 1998 - BankAmerica was acquired by NationsBank of Charlotte in what was
the largest bank acquisition in history at that time. The merged bank took the
better-known name of Bank of America
 2004 - Bank of America announced it would purchase Boston-based bank
FleetBoston Financial
 2005 - Bank of America announced it would purchase credit card giant MBNA
 2006 - Bank of America and Banco Itaú entered into an acquisition agreement
through which Itaú agreed to acquire BankBoston's operations in Brazil
 2006 - Bank of America announced the purchase of The United States Trust
Company for $3.3 billion, from the Charles Schwab Corporation
 2007 - Bank of America acquires LaSalle Bank Corporation from Netherlands's
ABN AMRO Bank N.V.
 2008 - Bank of America announced that it would buy Countrywide Financial
for $4.1 billion
 2008 - Bank of America announced it’s intention to purchase Merrill Lynch &
Co., Inc. who was within days of collapse
5
04 April 2011
Current Strategies
 Get Lean
 Increase Global Excess Liquidity Sources by $442 billion to $378
 Reduced risk-weighted assets by $171 billion to $1.28 trillion
 “A Strong Company Begins with a Strong Balance Sheet”
 “[Focus] on selling non-core assets, increasing capital ratios, building liquidity and
reducing risk”
 Right the mortgage Crisis Risk
 “Our goal is to set a tone and create a risk management culture in which every
employee is empowered to raise an issue or express a concern.”
 Become “customer focused”
 “[be] responsive to the needs of customers and clients — providing the products
and services they want, when, how and where they want them”
6
04 April 2011
Existing Vision and Mission Statement
Vision Statement
Our vision is for Bank of America to be the World’s finest financial
services company. We think that this is an appropriate and achievable
goal.
Mission statement
We built Bank of America to meet the full range of financial needs for
people, businesses, and institutional investors; to attract the best
employees to serve our customers and clients; to support the
communities where we do business; and to create long-term value for
our shareholders. Todays Bank of America is a financial services leader
serving customers and clients worldwide. We help them to see and act
on opportunities to achieve their goals by delivering value,
convenience, expertise, and innovation.
7
04 April 2011
Proposed Vision Statement
Our vision is for Bank of America to be the World’s finest
financial services company.
8
04 April 2011
Proposed Mission statement
We built Bank of America to meet the full range of financial needs(2) for
people, businesses, and institutional investors(1); to attract the best
employees (9)to serve our customers and clients; to support the
communities where we do business(8); and to create long-term value for our
shareholders(5). Bank of America is a financial services leader serving
customers and clients worldwide(3). We help them to see and act on
opportunities to achieve their goals(6) by delivering value, convenience,
expertise(7), and innovation(4).
1.Customers
2.Products or services
3.Markets
4.Technology
5.Concern for survival, growth, and profitability
6.Philosophy
7.Self-concept
8.Concern for public image
9.Concern for employees
9
04 April 2011
External Audit
10
04 April 2011
Industry Analysis
# of employees
% operating Margin
$ Net Income
$ EPS
# branches
# Shares outs
Bank of
America
288K
15.29
1,446
.01
5700
10.5B
Citigroup
260K
19.8
9.30B
3.06
JP Morgan
Chase
242K
39.01
17.93B
4.5
2.92
3.97
Wells
Fargo
270K
33.91
12.83B
2.43
9000
5.29B
11
04 April 2011
Opportunities
1. Smartphones will reach more than 2.5 billion users by 2015
2. According to industry sources, mobile banking users worldwide will reach
530 million by 2013, up from just over 300 million in 2011
3. The US banks sector grew by 11.3% in 2010 to reach a value of $11,713.2
billion
4. Projected increase of population in the United States of 82% from 2005 to
2050
5. consolidation of the financial services sector provides potential for company
acquisitions
6. Expansion into the global market
7. President Obama unveiled a stimulus plan totaling 447 Billion
12
04 April 2011
Threats
1. Mortgage rates hit record low: 30-year fixed nears 4%
2. Stock price dropped over 50% since 2008
3. The number of United States bank failures increased from 25 in 2008 to 92 in
2011.
4. The cost to businesses worldwide adds up to a staggering $221 billion each
year.
5. Consumer defaults on credit cards, mortgages, etc.
6. The possibility of the Federal Reserve increasing interest rates.
7. The Dodd-Frank Act, signed into law on July, will have a significant impact
on the US banking industry
8. Potential for United States economic relapse
13
04 April 2011
EFE Matrix
External Factor Evaluation Matrix (EFE)
Opportunities
Weight Rating Weighted Score
1. Smartphones will reach more than 2.5 billion users by 2015
0.09
3
0.27
2. According to industry sources, mobile banking users worldwide
0.07
3
0.21
will reach 530 million by 2013, up from just over 300 million in
2011
3. The US banks sector grew by 11.3% in 2010 to reach a value of
0.07
4
0.28
$11,713.2 billion
4. Projected increase of population in the United States of 82%
from 2005 to 2050
5. consolidation of the financial services sector provides potential
for company acqusitions
6. Expansion into the global market
7. President Obama unveiled a stimulus plan totaling 447 Billion
0.05
4
0.20
0.06
2
0.12
0.09
0.06
3
3
0.27
0.18
Threats
Weight Rating Weighted Score
1. Mortgage rates hit record low: 30-year fixed nears 4%
0.09
3
0.27
2. Stock price droped over 50% since 2008
0.07
2
0.14
3. The number of United States bank failures increased from 25 in
0.06
3
0.18
2008 to 92 in 2011.
4. The cost to businesses worldwide adds up to a staggering $221
0.05
1
0.05
billion each year.
5. Consumer defaults on credit cards, mortgages, etc.
0.05
2
0.10
6. The possibility of the Federal Reserve increasing interest rates.
0.06
3
0.18
7. The Dodd-Frank Act, signed into law on July, could have
0.05
3
0.15
significant impact on the US banking industry
8. Potential for United States economic relapse
0.08
1
0.08
TOTALS
1.00
2.68
14
04 April 2011
CPM
15
04 April 2011
Internal Audit
16
Organizational Structure
04 April 2011
Chairman
CEO, Brian
T Moynihan
Global
Technology
and
Operations
Executive,
Catherine
P. Bessant
Co-Chief
Operating
Officer,
David C.
Darnell
Global
Strategy
and
Marketing
Officer,
Anne M.
Finucane
Corporate
General
Auditor,
Christine
P. Katziff
Chief Risk
Officer,
Terry P.
Laughlin
Global
General
Counsel,
Head of
Compliance
&
Regulatory
Relations,
Gary G.
Lynch
Co-Chief
Operating
Officer,
Thomas
K.
Montag
Global
Head of
Human
Resource
s, Andrea
B. Smith
Legacy
Asset
Servicing
Executive,
Ron D.
Strurzeng
ger
Chief
Financial
Officer,
Bruce R.
Thompson
17
04 April 2011
Divisional Analysis
18
04 April 2011
Divisional Analysis
19
04 April 2011
Financial Information:
Income Statement
20
04 April 2011
Financial Information:
Balance Sheet
21
04 April 2011
Financial Information:
Cash Flow
22
Financial Information:
Ratio Analysis
04 April 2011
2010
2011
Current Ratio
0.66
0.64
Quick Ratio
0.66
0.64
0.19
0.18
1.9
1.65
0.56
0.52
Return on equity
-0.009
0.006
Return on assets
-0.0009
0.0006
0.93
0.89
15.77
16.75
Tier 1 leverage
7.21
7.53
Efficiency Ratio
74.61
85.01
Liquidity Ratios
Leverage Ratios
Debt-to-Total Assets Ratio
Debt-to-equity Ratio
Long-term debt-to-equity Ratio
Key Ratios
Loan to deposit ratio
Total Capital
23
04 April 2011
Financial Information:
Company Worth
Bank of America
Company Worth Analysis
Stockholders' Equity
Net Income x 5
(Share Price/EPS) x Net Income
Number of Shares Outstanding x Share Price
$229,095,000,000
$7,230,000,000
$803,976,000,000
$56,395,080,000
Method Average
$274,174,020,000
JP Morgan Chase
Company Worth Analysis
Stockholders' Equity
Net Income x 5
(Share Price/EPS) x Net Income
Number of Shares Outstanding x Share Price
$183,573,000,000
$94,880,000,000
$140,837,500,000
$125,442,275,000
Method Average
$136,183,193,750
24
04 April 2011
Strengths
1. Bank of America serves clients in more than 150 countries and has a
relationship with 99% of U.S. Fortune 500 companies
2. 21 in the Global 500. Bank of America Corp.
3. BOA serves approximately 55 million consumers, clients and small businesses
around the world, doing business with one out of every two households in
the U.S
4. BOA has approximately 5,700 banking centers and approximately 17,750
ATMs
5. The company’s new Merrill Edge account enables customers to manage their
banking and investing activities through an integrated platform.
6. BOA lowered their long-term debt by $76 billion in 2011.
7. Revenue diversification is helping the company to serve a large customer
base, as well as helping it to offset volatility in its revenue streams
8. Decreased Non-preforming loans by 5 billion in 2011
25
04 April 2011
Weaknesses
1. International markets only account for approximately 10% of the bank's
revenue.
2. BOA efficiency ratio has increased over 10% in the last year to 85.59%
3. EPS of -0.37 in 2010 and 0.01 in 2011
4. Net income loss of 2.2 billion in 2010
5. BoA’s revenues have been declining since 2009 at a compounded annual
change rate of 12% to $93,454 million in 2011
6. The representations and warranties provision in 2011 included $8.6 billion
related to the BNY Mellon Settlement and $7.0 billion related to other
exposures.
7. Bank of America has a ACSI index rating of 68
26
IFE Matrix
04 April 2011
1.
2.
3.
4.
5.
6.
7.
8.
1.
2.
3.
4.
5.
6.
7.
Internal Factor Evaluation Matrix (IFE)
Strengths
Bank of America serves clients in more than 150 countries and has a relationship with
99% of U.S. Fortune 500 companies
21 in the Global 500. Bank of America Corp.
BOA serves approximately 55 million consumers, clients and small businesses around the
world, doing business with one out of every two households in the U.S
BOA has approximately 5,700 banking centers and approximately 17,750 ATMs
The company’s new Merrill Edge account enables customers to manage their banking and
investing activities through an integrated platform.
BOA lowered their long-term debt by $76 billion in 2011.
Revernue diversification is helping the company to serve a large customer base, as well as
helping it to offset volatility in its revenue streams
Decreased Non-preforming loans by 5 billion in 2011
Weaknesses
International markets only account for approximately 10% of the bank's revenue.
BOA efficiency ratio has increased over 10% in the last year to 85.59%
EPS of -0.37 in 2010 and 0.01 in 2011
Net income loss of 2.2 billion in 2010
BoA’s revenues have been declining since 2009 at a compounded annual change rate of
12% to $93,454 million in 2011
The representations and warranties provision in 2011 included $8.6 billion related to the
BNY Mellon Settlement and $7.0 billion related to other exposures.
Bank of America has a ACSI index rating of 68
TOTALS
Weight Rating Weighted Score
0.10
3
0.30
0.04
3
0.12
0.07
4
0.28
0.09
4
0.36
0.05
3
0.15
0.05
3
0.15
0.06
4
0.24
0.05
4
0.20
Weight Rating Weighted Score
0.09
2
0.18
0.06
2
0.12
0.06
2
0.12
0.07
2
0.14
0.10
1
0.10
0.05
2
0.10
0.06
1.00
2
0.12
2.68
27
04 April 2011
Strategy Formulation
28
04 April 2011
SWOT Matrix
SO Strategies
1 Increase positive presence in Social Media (S1 S3, O1, O2, O3, O7)
2 Increase marketing by 50% (S1, S2, S3, S4, O1, O2, O3, O4)
3 Increase marketing to mobile users (S1, S3, S4, O1, O2, O3, O4)
ST Strategies
1 Increase number of ATMs (S1, S3, S4, T4)
WO Strategies
1 Increase customer service training (W2, W7, O1, O2, O4)
2 Develop consumer banking applications (W7 O1, O2, O3, O7)
3 Continue expansion into global market (W1, W5, O2, O5)
WT Strategies
1 Continue to sell non-core assets (W1, W5, T2, T3, T4, T8)
29
04 April 2011
Space Matrix
•
•
•
•
Market development
Market penetration
Product development
Related diversification
30
IE Matrix
04 April 2011
The IFE Total Weighted Scores
Strong
Average
4.0
Weak
3.0
2.0
1.0
• Backward, Forward,
horizontal penetration
• Market penetration
• Market development
• Product development
2
3.0
1
5
4
2.0
6
3
1.0
1 Deposits
2 Card Services
Consumer Real Estate
3 Services
4 Global Commercial Banking
5 Global Banking & Markets
Net Income
1,192
5,788
%
5.68%
27.59%
Revenue
12,689
18,143
%
13.46%
19.25%
IFE
3.23
3.04
EFE
2.64
3.26
(19,529)
4,402
20.99%
(3,154)
10,553
-3.35%
11.20%
2.25
2.96
1.87
2.45
2,967
14.15%
23,618
25.06%
2.88
2.16
7.79%
23.79%
100.00%
17,376
15,021
94,246
18.44%
15.94%
100.00%
2.74
2.51
Global Wealth & Investment
6 Management
1,635
7 All Other
4,991
1,446
Total
Adjusted Total*
20,975
* Does not include Real Estate Services
31
04 April 2011
Grand Strategy Matrix
•
•
•
•
•
•
Market development
Market penetration
Product development
Horizontal integration
Divestiture
Liquidation
32
BCG Matrix
04 April 2011
Net Income
%
Revenue
Relative
Market Share
%
Growth
Deposits
1,192
5.68%
12,689
13.46%
57%
-30%
5,788
27.59%
18,143
19.25%
1
-10%
-
(3,154)
-3.35%
63%
-20%
Card Services
Consumer Real
Estate Services
(19,529)
Global Commercial
Banking
4,402
20.99%
10,553
11.20%
1
3%
Global Banking &
Markets
2,967
14.15%
23,618
25.06%
44%
-13%
1,635
7.79%
17,376
18.44%
52%
-14%
4,991
23.79%
15,021
15.94%
Global Wealth &
Investment
Management
All Other
n/a
n/a
Total
1,446
Adjusted Total*
1
94,246
1
20975
* Does not include
Real Estate Services
33
BCG Matrix
04 April 2011
• Backward, Forward,
horizontal penetration
High
• Market High
penetration
• Market development
• Product development
Industry Sales
Medium
Growth Rate
Relative Market Share
Medium
Low
4
2
Low
• Product Development
• Diversification
• Divestiture
6
3
5
1
• Retrenchment
• Divestiture
• Liquidation
34
Matrix Analysis
04 April 2011
Alternative Strategies
IE
Forward Integration
BCG
COUNT
X
x
2
Backward Integration
X
x
2
Horizontal Integration
X
X
x
3
Market Penetration
X
X
X
x
4
Market Development
X
X
X
x
4
Product Development
X
X
X
X
4
X
2
Unrelated Diversification
X
1
Retrenchment
X
1
Related Diversification
SPACE
GRAND
X
Divestiture
X
X
2
Liquidation
X
X
2
35
04 April 2011
Possible Strategies
 Market Penetration
 SO2 - Increase global marketing by 50% cumulatively over 3 years
 SO3 - Increase marketing to mobile users
 ST1 - Increase number of ATMs
 Market Development
 WO3 - Continue expansion into global market
 Product Development
 WO2 - Develop consumer banking applications
36
04 April 2011
QSPM
Increase
Global
Marketing by Develop consumer
50%
banking applications
cumulatively
over 3 years
Opportunities
1. Smartphones will reach more than 2.5 billion users by 2015
2. According to industry sources, mobile banking users worldwide
will reach 530 million by 2013, up from just over 300 million in
2011
3. The US banks sector grew by 11.3% in 2010 to reach a value of
$11,713.2 billion
4. Projected increase of population in the United States of 82% from
2005 to 2050
5. consolidation of the financial services sector provides potential for
company acqusitions
6. Expansion into the global market
7. President Obama unveiled a stimulus plan totaling 447 Billion
Threats
1. Mortgage rates hit record low: 30-year fixed nears 4%
2. Stock price droped over 50% since 2008
3. The number of United States bank failures increased from 25 in
2008 to 92 in 2011.
4. The cost to businesses worldwide adds up to a staggering $221
billion each year.
5. Consumer defaults on credit cards, mortgages, etc.
6. The possibility of the Federal Reserve increasing interest rates.
7. The Dodd-Frank Act, signed into law on July, will have
significant impact on the US banking industry
8. Potential for United States economic relapse
Weight
0.09
AS
2
TAS
0.18
AS
4
TAS
0.36
0.07
3
0.21
4
0.28
0.07
1
0.07
2
0.14
0.05
4
0.20
2
0.10
0.06
-
-
-
-
0.09
0.06
4
4
0.36
0.24
3
2
0.27
0.12
Weight
0.09
0.07
AS
2
TAS
0.14
AS
3
TAS
0.21
0.06
-
-
-
-
0.06
2
0.12
4
0.24
0.05
0.06
2
-
0.10
-
3
-
0.15
-
0.05
3
0.15
1
0.05
0.07
-
-
-
-
37
QSPM
04 April 2011
Increase Global
Marketing
Develop consumer
By 50%
banking applications
cumulatively
over 3 years
1.
2.
3.
Strengths
Bank of America serves clients in more than 150 countries and has a
relationship with 99% of U.S. Fortune 500 companies
21 in the Global 500. Bank of America Corp.
BOA serves approximately 55 million consumers, clients and small
businesses around the world, doing business with one out of every two
households in the U.S
Weight
AS
TAS
AS
TAS
0.10
4
0.40
3
0.30
0.04
-
-
-
-
0.07
3
0.21
4
0.28
4.
BOA has approximately 5,700 banking centers and approximately 17,750
ATMs
0.09
4
0.36
2
0.18
5.
The company’s new Merrill Edge account enables customers to manage
their banking and investing activities through an integrated platform.
0.05
2
0.10
4
0.20
BOA lowered their long-term debt by $76 billion in 2011.
Revernue diversification is helping the company to serve a large customer
base, as well as helping it to offset volatility in its revenue streams
0.05
-
-
-
-
0.06
2
0.12
3
0.18
8.
Decreased Non-preforming loans by 5 billion in 2011
0.05
0
0.00
0
0.00
Weaknesses
International markets only account for approximately 10% of the bank's
revenue.
Weight
AS
TAS
AS
TAS
1.
0.09
3
0.27
2
0.18
2.
BOA effeciency ratio has increased over 10% in the last year to 85.59%
0.06
3
0.18
2
0.12
3.
4.
5.
EPS of -0.37 in 2010 and 0.01 in 2011
Net income loss of 2.2 billion in 2010
BoA’s revenues have been declining since 2009 at a compounded annual
change rate of 12% to $93,454 million in 2011
0.06
0.07
-
-
-
-
0.10
4
0.40
2
0.20
6.
The representations and warranties provision in 2011 included $8.6 billion
related to the BNY Mellon Settlement and $7.0 billion related to other
exposures.
0.05
-
-
-
-
Bank of America has a ACSI index rating of 68
0.06
3
0.18
2
6.
7.
7.
TOTALS
3.99
0.12
3.68
38
04 April 2011
Strategy Implementation
39
04 April 2011
3 Year Strategy & Annual Objectives
 First Year
 Increase marketing by 25% in 2012
 Have marketing costs of $2.75 billion by end of year
 Second Year
 Increase marketing by 10% in 2013
 Have marketing costs of $3 billion.
 Third Year
 Increase marketing by 10% in 2014
 Have marketing costs of $3.3 billion by end of 2014
40
04 April 2011
Year 1 Costs
 Increase Global Marketing by 25%
 Current Marketing: $2.2 Billion
 25% increase is $550 Million
 Total Marketing will be $2.75 Billion
41
04 April 2011
EBIT
Interest
EBT
Taxes
EAT
# Shares
EPS
EBIT
Interest
EBT
Taxes
EAT
# Shares
EPS
EPS/EBIT
100% Common Stock
Low
High
17,400,000,000
18,200,000,000
17,400,000,000
18,200,000,000
5,220,000,000
5,460,000,000
12,180,000,000
12,740,000,000
10,634,858,863
10,634,858,863
1.15
1.20
20% Stock 80% Debt
Low
High
17,400,000,000
18,200,000,000
22,000,000
22,000,000
17,378,000,000
18,178,000,000
5,213,400,000
5,453,400,000
12,164,600,000
12,724,600,000
10,654,643,036
10,654,643,036
1.14
1.19
100% Debt
Low
High
17,400,000,000
18,200,000,000
27,500,000
27,500,000
17,372,500,000
18,172,500,000
5,211,750,000
5,451,750,000
12,160,750,000
12,720,750,000
10,535,938,000
10,535,938,000
1.15
1.21
20% Debt 80% Stock
Low
High
17,400,000,000
18,200,000,000
5,500,000
5,500,000
17,394,500,000
18,194,500,000
5,218,350,000
5,458,350,000
12,176,150,000
12,736,150,000
10,615,074,691
10,615,074,691
1.15
1.20
42
04 April 2011
Bank of America
Projected Income Statement (in millions)
Net interest income
Noninterest income
Projected Financials:
Income Statement
2010
52,693
58697
2011
45,588
48838
2012
45,588
53722 Increase by 10%
111,390
28435
94,426
13410
99,310
13410 Same
12,400
70708
3,184
77090
- 2012
81627 CGS + 550Million
-153
2085
742
-704
Net income (loss)
-2,238
1,446
2,540
Preferred stock dividends
1357
-3,595
1361
85
1361 Same
1,179
Total revenue, net
of interest expense
Provision for credit losses
expected to reduce in
Good will impairment
All other noninterest expense
Income (loss before income taxes
Income tax expense (benefit)
Net income (loss) applicable to common
shareholders
4,273
1733 Averaged
43
04 April 2011
Bank of America
Projected Balance Sheet (in millions)
Assets:
Federal funds sold and securities borrowed
or purchased under agreements to resell
Trading account assets
Debt securities
Loans and leases
Allowance for loan and lease losses
All other assets
Total Assets
Liabilities:
Deposits
Federal funds purchased and securities
loaned or sold under agreements to
repurchase
Trading account liabilities
Commercial paper and other short-term
borrowings
Long-term debt
All other liabilities
Total liabilities
Share holders' equity
Total liabilities and shareholders' equity
Projected Financials:
Balance Sheet
2012 Assumptions
2010
2011
209616
194671
338054
940440
211183
169319
311416
926200
-41885
624013
2264909
-33783
544711
2129046
-33783 Same
544711 *
2130325
1010430
1033041
1033041 *
245359
71985
214964
60508
214964 *
60508 *
59962
448431
200494
35698
372265
182569
35698 *
372265 *
182569 *
2036661
228248
2264909
1899045
230101
2129146
211183 Same
169319 *
311416 *
927479 Increase to balance
1899045
231,280 Increased by net income2130325 prefered dividends
44
04 April 2011
Strategic Evaluation
45
Balance Score Card
04 April 2011
Area of Objectives
Measure or Target
Time
Expectation
Primary Responsibility
Customers
1
Satisfaction
Customer Survey results
Yearly
Marketing Department
2
Brand Identity
Industry Reports
Yearly
Marketing Department
Employees
1
2
Quality and service training
Employee Satisfaction
On site and webinars
Yearly
COO
Survey
Yearly
Human resources
# of ethics training sessions
Yearly
Human resources
Business Ethics/Natural
Environment
1 Ethics Training
Financial
1
Revenues
50% increase each year
Quarterly
CFO
2
Ratio analysis
better than Industry Avg,
Yearly
CFO
46
04 April 2011
Company Update
47
04 April 2011
Company Update
 Bank of America cut around 16,000 jobs by the end of 2012 as revenue
continued to decline because of new regulations and a slow economy. This
put a plan one year ahead of time to eliminate 30,000 jobs under a costcutting program, called Project New BAC
 stock doubled in value in 2012
 In 2012, they extended $19.1 billion in total credit to small businesses,
customers, local communities and nonprofits. They provided $22 million in
grants to fund critical needs, and another $22 million for housing. And they
announced a new 10-year, $50 billion goal to help improve the environment.
 On September 28, 2012, Bank of America settled the class action lawsuit over
the Merrill Lynch acquisition and will pay $2.43 billion.
 dropped to 66th on global 500 in 2013
 In September 2013, Bank of America sold its remaining stake in the China
Construction Bank for as much as $1.5 billion, marking the firm's full exit
from the country.
48
04 April 2011
Questions
49
04 April 2011
References
 Bank of America Corp. (2014). Merger History. Retrieved from Bank of
America: http://message.bankofamerica.com/heritage/#/merger-history
 Bank of America Corporation. (2012). 2011 Annual Report. Charlotte.
 David, F. R. (2013). Bank of America Corporation - 2011. In F. R. David,
Strategic Management; A competitive Advantage Approach (pp. 143-148).
Florence: Pearson.
 MBA Lectures. (2010, 12 09). SWOT Analysis of Bank of America. Retrieved
from MBA Lectures: http://mba-lectures.com/marketing/swot-analysismarketing/1155/swot-analysis-of-bank-of-america.html
 Our Team. (2014). Retrieved from Bank of America:
http://about.bankofamerica.com/en-us/our-story/ourteam.html#fbid=tptoqen5nEc
 SWOT analysis of Bank of America Corporation. (2011). Retrieved from
MarketingMix: http://marketingmix.org/swot-analysis-of-bank-of-americacorporation/
 Yahoo! Finance. (2014). Bank of America Corporation (BAC). Retrieved from
Yahoo! Finance: http://finance.yahoo.com/q?s=BAC
50
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