S. By deposits at that time.
The company completed the largest bank merger in U.S. history with the acquisition of NationsBank. The next major step was the 2004 acquisition of FleetBoston, followed by MBNA, a major credit card company. The bank began to expand outside of the U.S. In 2006. Further additions have been the United States Trust Company in 2006, LaSalle Bank in 2007, Countrywide Financial in 2007 and Merrill Lynch in 2008. These deals have not only enhanced the Bank of America's retail footprint but they have also diversified the business considerably both in terms of geography and in terms of business line. Many of these acquisitions form the core of entire operating groups at Bank of America today. Mergers and acquisitions are a key component of the company's growth strategy due to the large cost and time frame of establishing a proper footprint in a region. It is simply more affordable to buy into a market than to build into a market. In addition, brand value is retained and the company can realize synergies almost immediately.
As a result of all of this merger and acquisition activity, Bank of America is now among what is known as the "Big Four" banks in the U.S., along with Citigroup, JP Morgan Chase and Wells Fargo. Bank of America is the largest bank in the U.S. By asset value at $2.2 trillion. By comparison, JP Morgan Chase has $2 trillion in assets; Citigroup $1.8 trillion and Wells Fargo $1.2 trillion (FFIEC, 2010). Bank of America's strong position gives it strength in economies of scale, technological innovation, synergies between divisions and brand equity. Using older data, Bank of America is the world's tenth-largest bank (2nd in the U.S.) with $1.7 trillion in assets (Rogers, 2009).
The implications for this are that the Bank of America has a broad footprint. It has a very broad customer base, which creates opportunities for cross-business referrals and strong relationship-building. However, that Bank of America still has as many large competitors as it does is indicative of the fact that the competitive environment is very difficult. Each major competitor can match Bank of America's capabilities and core competencies. In addition, banking is becoming a more globalized industry as banking trade barriers fall. Bank of America must contend on a global scale with institutions much larger than itself, including the Royal Bank of Scotland, HSBC, Barclay's. BNP Paribas, Deutsche Bank, Credit Agricole, UBS and Mitsubishi Financial, all of which are bigger than Bank of America and have more experience operating in international markets.
Global Reach
Bank of America still has tremendous strength in its U.S. base. That $6.3 billion in profit in 2009 was considered to be a bad year is indicative of the amount of value in the Bank of America and Merrill Lynch franchises. In the U.S., Bank of America is considered to be a top four bank, often viewed as the largest depending on the measure chosen. Bank of America has a presence in all fifty states and claims to have a business relationship with one out of every two Americans (2009 Annual Report). This tremendous reach means that the U.S. market is perhaps saturated, and the company will need to focus on diversification for its continued growth.
The U.S. market is highly diffused and intensely competitive. Beyond the major banks, there are many smaller banks from regional powerhouses to small local banks. All compete with the Bank of America for some aspect of BoA's business. The banking industry is also heavily regulated, both at the state and federal level. This complex regulatory regime is one of the remaining impediments to growth in the U.S. banking market.
The U.S. industry is subject to a considerable amount of consolidation of late, even into the financial crisis. It can be expected that this will give Bank of America significant domestic growth opportunities via the M&a market, subject of course to regulatory approval, in particular from antitrust authorities. Bank of America is large enough that a merger with another major U.S. bank would likely run afoul of antitrust regulators, especially another California bank like Wells Fargo.
The Bank of America has only limited access to the Canadian market. That market is heavily protected, so Bank of America's primary activities are in merchant banking, servicing Canadian subsidiaries of its U.S. customers, and in Merrill Lynch. The Canadian operation is a Schedule III bank under the Canadian Bank Act, which limits its activities significantly. Bank of America is also involved in the credit card business in Canada (2009 Annual Report).
The international market is where there is the biggest room for growth for the Bank of America. The company has subsidiaries in an estimated 150 countries worldwide (2009 Annual...
Bank America Case Study From Goldsmith & Carter textbook, select Bank America (Chapter 2) case study assignment - uploaded Write a (5-7) page paper: 1.Outline talent management program led success company. Bank of America case study The modern day working environment is a highly complex and intricate field, in which employees and employers have to continually meet new demands, standards and challenges. Employees, for instance, have to perform new tasks at superior
Bank of America's Strategic Initiatives: The traditional ways in which banks operate have been broken down by the recent political, socio-economic and technological changes that have occurred around the world. The recent changes have also influenced the economic trends, which have had a significant impact on the banking industry. Banks have largely been involved in product and geographical expansion in foreign and emerging markets because of globalization and deregulation. Notably, this
Bank of America: Life's Better When We're Connected Strategic Audit & Analysis Current Situation Bank of America, as of 2010 was the 5th largest company in the United States by total revenue and the second largest non-oil company in the United States following Wal-Mart. Bank of America was listed by Forbes as the third largest company in the world. In 2008, Bank of American acquired Merrill Lynch making Bank of America the world's
Bank of America Leadership Overview of Corporation Bank of America Corporation, a multinational banking and financial services organization that is the second largest holding company in the entire United States by assets, and the fourth largest bank by capitalization. Headquartered in Charlotte, North Carolina, the banks serves clients in more than 150 countries and has a business relationship with over 99% of U.S. Fortune 500 companies and 83% of the Fortune Global
Bank of America built its success by leveraging different elements of bank deregulation to grow the company into a national bank in the U.S., one of the country's largest. The driving force behind this success was visionary leadership at the top of the company and the ability to integrate a high growth platform with multiple acquisitions at the more functional managerial levels of the company. Thus, the company's leadership development
Banks Improper Foreclosure and Mortgage Practices in the Banking Industry Efficient Market Hypothesis Real Estate Bubble Sub-Prime Mortgages Overview on the Value of Banks Arguments against Financial Intermediaries Ethical Violations This research paper aims to shed light into what led to the global financial collapse that, for the most part, began in the U.S. housing market and the ethical implications that followed. Many researchers agree that the primary drivers that led to the real estate crisis was the
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now