Traditional bank of America was one of many largest receivers of the troubled assets alleviation program (TARP) which was developed in 2008. The U. S. Authorities made the terms of the TARP program very favorable to the bank. Therefore, in December, 2009 the financial institution was able to repurchase all stocks of TARP Preferred Stock. Paying off TARP quickly saved the bank more than $25M which will would have been cash outflow as dividend payments. As a result of choosing to pay this kind of off quickly, the bank will be able to move closer to profitability.
Second, the wealth management business unit features significant potential due to the purchase of Merrill Lynch and LaSalle, the U. S. supplementary of ABN Amro. Those two acquisitions bring a much increased depth of services and product interesting depth to the company, in addition to much greater variety of clients globally. Additionally, it provides the wealth management organization unit with all the opportunity to upsell and cross-sell specific companies to corporate and business and high net worth clients as well. The Bank of America has also been a global head in employing quality supervision techniques to improve the efficiency and gains possible in the wealth administration and investment programs (AlSagheer, 2011). Applying constraint-based building and quality management strategies typically used in business procedure management (BPM) and organization process reengineering (BPR) your bank has been able to continually improve the yields on their investment and also coordinate over the many assets they have available in this organization unit.
One more significant option is the rapid adoption of mobile web commerce and bank within global communities, a lot of which Financial institution of America already have founded operations in (Valentine, 2011). Given the rapid incline of Google’s Android main system and the dominance of the Apple iOS systems, this area can continue to fl9urish as the majority of banking today is actually performed online,. Not really in person (Valentine, 2011)
The greatest potential threat for the Bank of America are definitely the regulatory adjustments that the U. S. And foreign government authorities continue to examine and go into rules. These regulating requirements are costly to comply with, requiring countless dollars’ in IT purchases over time (McKenney, Mason, Copeland, 1997). The costs of conformity and confirming will always increase however , creating a much greater strain for the bank’s profitability over time.
One more significant danger is that of Federal government Deposit Insurance Corporation (FDIC) insurance premiums raising over time, becoming more costly to shell out. The many financial institution failures during the 2008 and 2009 timeframe have raised the costs of premiums pertaining to the financial institutions that are nonetheless solvent. It has led to higher costs for not only insurance, but also for the systems in house for managing them (AlSagheer, 2011).
Your bank of America has been capable of successfully navigate very difficult monetary conditions internationally and stay solvent, when also concluding two key acquisitions through the same period. The bank continue to be recover from the economic downturn as well as the transactions with reduced cash flow as demonstrated in the analysis in Appendix A. The strengths and opportunities the fact that Bank of America provides combined have the prospect to transform the company and generate it profitable again by FY2012 time-frame. Based on a great analysis of their financials and from studying the analysis by their senior management team.
The tips for Bank of America focus on increasing the lifetime customer value of existing base and getting new, high net worth customers for the future. Increasing the investments in mobile-based technologies is going to significantly raise the level of comfort for both existing and new prospective clients, as does the support for paperless ventures using Android and iOS-based camera phones (Valentine, 2011). Second, your bank needs to pay attention to trimming the asset foundation of unprofitable operations. There are, according to the SECURITIES AND EXCHANGE COMMISSION’S document which the bank provides filed, practically 2, 500 branches that cost more to use vs . The revenue that they produce. The bank needs to continually use the concepts of 6 Sigma and quality administration top cut back every operations which are not profitable today, just as they may have done by using an isolated basis at just the strategy level in the past (AlSagheer, 2011). The continuing growth of the bank’s global reach has to also often be accentuated and strengthened with time as well. A location where the financial institution could grow significantly over a global level in addition to becoming more multichannel based in terms of business and personal financial. The Bank of America should also continue to reduce its SGA expenses with the use of profitability research and ongoing pruning of unprofitable procedures.
Growth Success and Economic Ratios to get Bank of America Company
(2001 – 2010)
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Suzanne Kapner, Justin Baer. (2011, May). BofA to cut $850bn bad loan book by 50 %. FT. com
James T. McKenney, Rich O. Mason, Duncan G. Copeland. (1997). Bank of America: The crest and trough of technological management. MIS Quarterly, 21(3), 321-353.
Orr, Invoice. (2005). An evergrowing array of Internet banking companies. American Bankers Association. ABA Banking Log, 87(12), forty seven.
Schultz, 3rd there’s r.. (2010). Adjoining Opportunities: The