In the SWOT analysis for Bank of America one I performed a SWOT analysis for the Bank of America. I assumed the role of a mutual fund manager work for First Investment Inc Investment Inc. With the information I gathered in part one of my paper I made the decision to invest in Bank of America. In part two of these papers I will further explain why I chose to invest in Bank of America. This paper will address the financial health of Bank of America by reviewing the banks income statement, balance sheet, and cash flow (MGT/521 course syllabus). I will also analyze Bank of America’s financial health and compare it against another bank. After I do the comparison I will compare Bank of America technological advantages, or address any deficiencies they may have. This paper will also address the effects of globalization on the Bank of America and I will conduct a benchmarking analysis that will include the best practices of Bank of America, operational processes and procedures for Bank of America and products or services for Bank of America.
Once regarded as one of the top banks in the banking industry Bank of America is on the decline. According to infoplease on March 31, 2010 Bank of America was ranked number one as one of the largest banks in the United States. Today they are second to JPMorgan Chase and they are in worst shape compared to the other large banks. Bank of America has made several faulty decisions that have cause the banks decline in the banking industry. Kenneth Lewis the CEO of Nations Bank acquired Bank of America after the acquisition Bank of America went on to acquire FleetBoston Financial for $48 billion and in 2005 Bank of America acquired Maryland Bank, National Association (MBNA). The acquisition of Maryland Bank, National Association positioned Bank of America at the top of the United States credit card business (New York Times 2012).
First Investment Inc has come to pinpointed how Kenneth Lewis the CEO of Bank of America went wrong. In 2008 Countrywide Financial was acquired. Countrywide Financial would later bet caught up in the subprime disaster. Merrill Lynch investment bank was a billion dollar investment that was suffering from its own bad mortgages. With 30 billion in losses from Countrywide and 300 million to all the lawsuits filed against Bank of America; Kenneth Lewis had the corporation going on the decline. Bank of America didn’t do their homework on Merrill Lynch. Merrill Lynch had loses that were far above what Bank of America expected but they did convey the information to their shareholders. The lose cause bank of America to ask for a 20 billion dollar bailout in 2008 and 2009. Bank of America’s shares were cut in half after the news got out about the losses from Merrill Lynch investment bank (New York Times 2012).
In 2012 Bank of America has started to turn around. Bank of America reported a first quarter gain. Bank of America had the lowest in credit loses between clientele. The failing business mortgages and Bank of Americas reputation balance out on Wall Street. Comparing Bank of America to the top two mortgage companies (JPMorgan and Wells Fargo) Bank of Americas gross is in decline. Both institutions (JPMorgan and Wells Fargo) announced a gain gross and income. Even though Bank of America’s first quarter earnings were greater than expected Bank of America’s earning fell short compared to JPMorgan and Wells Fargo.
On a positive note Bank of America’s global market reported a 30 million dollar gain, but in the fourth quarter the combination of Bank of America and Merrill Lynch was down in profits after more than doubling in profits in the fourth quarter.
First Investment Inc has a few concerns when it comes to investing in Bank of America. The first concern is the bad investment decision Kenneth Lewis made when he decided to purchase Countrywide Financial. When a purchase of this magnitude is made the business making the purchase must first...
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