BANK OF AMERICA

Bank of America



Bank of America

Introduction of the Bank

Bank of America is a bank holding company, which provides a full range of banking and financial services and products in more than 28 million households and 2 million businesses in the U.S. and internationally. Its main areas of the market cover the entire United States, after the recent merger with FleetBoston Financial Corporation, as well as selected international markets. Banking operations are divided into the following main business segments: consumer and commercial banks.

Services and Customers of the Bank

Consumer and Commercial Banking provides a wide range of products and services for individuals, small businesses and midsize companies through the delivery channels, which include about 4,277 banking centers and 13,241 ATMs in 21 states and the District of Columbia. The segment provides specialized services, such as the emergence and maintenance of mortgage issuance of credit cards, student lending, and some insurance services, commercial lending, services and cash management (Bonadio, 1994).

Asset Management includes private banking (financial solutions for wealthy clients), management of capital (stocks, bonds, cash and alternative investments), and investment services (full service and discount brokerage services). Investment Banking and Global Corporate provide capital raising products, government agencies, cash management, financial institutions, leasing and financial advisory services to international and domestic corporations, capital markets and trade finance.

The Size/Scale of the Organization

The total sales of the Bank of America are $134,194.0. The number of employees in the Bank of America is 288,000. According to the report of 2010, the Bank of America is the 5th largest organization in America in the view of the total revenues and is also the second largest non-oil company in United States after Wal-Mart. The Bank of America has a total of 6,000 locations all over the United States and also has 300 branches abroad. In accordance with the 2010 annual report, the Bank has branches all over the 50 states, in the Columbia District and in more than 40 countries abroad(Bonadio, 1994).

Bank of America Corporation Income Statement

Dec 10

Dec 09

Dec 08

Revenue

134,194.0

150,450.0

113,106.0

Cost of Goods Sold

--

--

--

Gross Profit

134,194.0

150,450.0

113,106.0

Gross Profit Margin

--

--

--

SG&A Expense

57,294.0

52,372.0

20,739.0

Depreciation & Amortization

1,731.0

1,978.0

3,319.0

Operating Income

--

--

--

Operating Margin

--%

--%

--%

Nonoperating Income

--

--

--

Nonoperating Expenses

--

--

--

Income Before Taxes

(1,323.0)

4,360.0

--

Income Taxes

915.0

(1,916.0)

420.0

Net Income After Taxes

(2,238.0)

6,276.0

(420.0)

Continuing Operations

(2,238.0)

6,276.0

4,008.0

Discontinued Operations

--

--

--

Total Operations

(2,238.0)

6,276.0

4,008.0

Total Net Income

(2,238.0)

6,276.0

4,008.0

Net Profit Margin

-1.7%

4.2%

3.5%

Diluted EPS from Total Net Income

(0.37)

(0.29)

0.55

Dividends per Share

0.04

0.04

2.24

All amounts in millions of US Dollars except per share amounts.

Demographic Forces

Demographics factors are hard to predict. Age is one of the factors that can be predicted easily. This factor of age affects various aspects at the operation of Bank of America such as interest rate, economic growth, asset prices, housing, inflation and government spending. The estimates of age of the population show that the emerging market of the bank would have young and growing population. Moreover, the aging of the baby boomers would force Bank of America to reconsider the rate of interest. As they would be aging and would get closer to their retirement ages they would need more loans so they will be facing more difficulties in paying back the ...