Bank Of America Financial Analysis

Analysis of ways to improve Bank of America Financially While Bank of America’s products and services offered number in the thousands; the figures are generally organized into two triangle groups Retail Banking and Commercial Banking (Rinzinwangmo & Fengming, 2009). For the Retail Banking group, the areas consist of mortgages, deposits, and credit cards (Rinzinwangmo & Fengming, 2009). For the Commercial Banking group they consist of small business money market services, investment banking asset management, and corporate bank lending (Rinzinwangmo & Fengming, 2009). Bank of America’s strategy has been to try to balance these triangle groups in order to give them the ability to absorb market downturns in specific industries by offsetting losses

Bank of America, like other large banks, make most of their revenue from core banking activities than any other activity, with nearly half of their income coming in the form of net interest income (King, 2015). This essentially means that the banks primary source of income comes from deposits by customers and businesses (King, 2015). Therefore, the best ways for Bank of America to improve financially is by gaining more customers, keeping current customers, and improve on their reputation in order to entice customers, investors, and

A few tactics that Bank of America can use to help keep existing customers include: increasing physical banking locations, providing more rewards for loyal customers, and getting rid of overdraft fees. Presently, Bank of America operates in all 50 states via mobile banking and has 4,855 branches in 34 states (Roberts, 2015; “Bank of America SWOT Analysis”, 2015). Since 2007, the total number of Bank of America branches has declined by more than 1,200 due to the financial crisis, but according to Ken Thomas, a Miami-based bank consultant, Bank of America is “getting back to normal.” (Roberts, 2015). While there has been a decline in brick and mortar branches due to the increase of mobile banking, having brick and mortar branches is a very important element in being able to retain customers. Providing more rewards for loyal customers is also crucial in retaining customers. One way this can be done is by gradually increasing loyal customers annual percentage yield over time. In addition, Bank of America’s overdraft fees are one of the most common complaints towards the company. Two years ago, Bank of America was considering adding a new checking account that prevented customers from getting overdraft fees, but instead opted for overdraft protection, which transfers money from a savings account or a credit card to cover overdrafts with a charge of $12 per transfer