Martin Velemir BSAD 495 Bank of America SWOT Analysis 9/20/11 THE BANK OF AMERICA’S STRENGTHS * The Bank of America is one of the world’s largest bank holding corporation in the U. S. by assets, and the second largest bank company by market capitalization. * The Bank of America is the second largest non-oil company in the United States. * The Bank of America is the leading market position in the United States. * The Bank of America has a strong global presence; and possesses a great brand image, superior customer service and high customer satisfaction. Because of various actions (mergers, joint ventures and acquisitions), the Bank of America has a strong position and presence in the domestic market.
* The Bank of America provides a very strong growth in core banking. * Capital management and dividend policy. * The Bank of America provides a diversified range of banking and non-banking financial services and products. * Innovations in products and services give it a major strength in attracting customers. * The Bank of America provides good services of convenience: online banking, mobile banking, and large retail branch availability. The Bank of America serves clients in more than 150 countries and has a relationship with 99% of the U.
S. Fortune 500 companies and 83% of the Fortune Global 500. THE BANK OF AMERICA’S WEAKNESSES * While the Bank of America does have clients in over 150 countries, but only 90% of its national market make their revenue in sales and just 10% internationally. * The Bank of America has weak wholesale banking operations. * The Bank of America has lost the ability to compete head-to-head in an environment where it lacks a size advantage. The Bank of America has been criticized by its customers for raising their interest rates.
* The Bank of America has been experiencing deterioration asset quality, weak geographic asset allocation, and declining net interest margins. THE BANK OF AMERICA’S OPPORTUNITIES * The Bank of America has opportunity to increase market share by product development and markets penetration in the domestic markets by acquisitions. * The Bank of America can increase the amount of clients by expanding globally through joint ventures, acquisitions and mergers. The Bank of America has the opportunities to offer innovative products and services to its customers. * Due to increasing trend towards internet banking, The Bank of America can introduce online banking to its customers all around the world. * Hispanic banking.
* Acquisition opportunity of the Countrywide Financial Corporation. * Additional consolidation in the banking sector. * Increasing customers’ wealth and trend in the direction of the investment after the financial crises from 2007-2010. Diversification towards the non-banking services.
* Additional consolidation in the banking sector. THE BANK OF AMERICA’S THREATS * The Bank of America has strong competitors in the banking industry. (JP Morgan Chase, Citigroup, Wells Fargo) * Bad publicity. * Strong competition to sustain its market share due to other competing financial institutes improving their own strategies/policies. * The Bank of America is facing strong political instability and regulation and tariffs in various countries of the world. New regulations and policies may hinder financial firms’ business forms and could hurt the housing market. * The recent financial economic turmoil and increasing unemployment are threats for the Bank of America.
* There are restrictions in capital markets due to security issues and black money issues around the world and are growing in number. * The call for constant hard work to improve risk oversight and governance, particularly at the board level. * The integration of the Bank of America’s competitor: Merrill Lynch.