Bank of America is a global financial services company headquartered in Charlotte, NC. It is one of the world’s largest financial institutions. Bank of America serves over 53 million customers. They serve these customers through 5,500 retail banking offices. Bank of America is known as a leader in the online banking world. Online alone the company services 30 million active users. The company serves customers in all 50 states and more than 40 countries. The company has numerous different lines of business and employs over 260,000 people. (Bank of America 2012) Historical Perspective
The entire banking industry is made of mergers and acquisitions. The history of Bank of America is no different. Bank of America’s earliest predecessor was called the Massachusetts Bank. Boston petitioners wanted the right to start a bank. They were armed with $300,000 in capital and had many supporters. 15 of the original shareholders were woman. Among the founders and first customers were names like; John Hancock, General Henry Knox, and Paul Revere. That branch opened for business on July 5th 1784. This happened before the US Constitution had even been adopted.
John Hancock was the governor of Massachusetts. In 1784 he signed the banks charter making it only the second bank to receive a state charter. In 1786 Massachusetts Bank financed one of the earliest sailings of an American ship to china. This opened up the china trade. The bank continued to grow throughout America. Expanding to new states and changing names like Pacific National. It is believed that the Easton National Bank, one of the predecessors to Bank of America, was the first pay interest on deposits. Offering numerous financing to significant projects through history, one of the most notable is in 1815.
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After the fires that devastated the capital, the bank financed the reconstruction of the capital. Fast forward over a century to 1998. NationsBank merges with Bank of America. This move created the first coast-to-coast retail banking franchise. (Our Heritage, 2010) Bank of America continues to grow acquiring financial service companies like US Trust and Merrill Lynch. With a storied history in the financial services sector, and building of our country, Bank of America is the most fitting name. Lines of Business Bank of America focuses on 3 customers.
They focus on the people, companies, and institutional investors. They are the leading provider of checking, savings, credit and debit cards, and home equity lending. Bank of America is the nation’s largest loan servicer offering numerous different home mortgage options. Bank of America is a strong hold in Global Corporate and Investment banking. The Bank also has a strong focus on financial advising and wealth management. The addition of Merrill Lynch has put Bank of America as the leader in Financial Services. Financial Position Bank of America, or BAC, is often one of the most popularly traded stocks.
In April, the share price of BAC declined over 5% to $11. 63. (Oleinic, 2013) As interest rates start to bottom out, the bank must constantly adjust to keep revenue up. Currently the 52 week range of BAC is $6. 90 - $13. 99. Although it has a larger 52 week range, the company is still somewhat stable. It has achieved this by building a strong balance sheet. In 2012 Revenue in millions was reported at $84,235 while Net income was reported at $4,188. Compared to 2011 revenue dropped almost $10,000 however Net income increased from $1,446. As far as the shareholders are concerned, BAC has an EPS of $. 2. Overall the company is positioning itself to remain strong during the current downturn. (Bank of America 2012) Bank of America must constantly adhere to stricter policies from the SEC; while still maintain a positive image in the consumers mind. As the bank continues growth it must remain competitive against its 3 competitors; Citi, Wells Fargo, and Chase. Conclusion Bank of America plays a major role in the global market place. From its beginning in the late 1700’s, the bank has seen the value in financing international trade. Centuries later the same remains true.
Any company as large as Bank of America will be influential in the Global market place. As mentioned above, with 260,000 employees, the company has certainly left a very deep foot print in the global economy. The unique thing with Bank of America in the global economy is the amount of other global businesses that depend on the stability of the company. It is a company that finances several other global companies. For this reason, I think Bank of America will be here for a long time. It has positioned itself to grow during an economic downturn. We will have to wait to see if it has been good growth.
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