Bank of America: Decisions for the Future

In: Business and Management

Submitted By adub23
Words 1670
Pages 7
Bank of America: Decisions for the Future

ECO 550: Managerial Economics

16 June 2013

Abstract

Long-term capital budgeting is the process used by many companies to make substantial term investments, in order to receive the greatest cash flow. A company must first look at an analysis of cash flows and cost and earnings of the project to determine whether to accept or reject a capital budgeting project. The three rules used to make decisions towards capital budgeting; the payback period, net present value (NPV), and internal rate of return (IRR). The Payback Period is the tool that is used to determine how long it takes for the project to recover its initial costs for funding the project. The Net Present Value shows how the present project will affect the company. The Internal Rate of Return reveals the discount rate if the NPV equals zero. The antitrust law is a federal and state law regulation of corporations. The law insures that company does not grow too large which may prevent the growth of other corporations. The government believes that without this law that prices can become fixed and demand will be unfair in the market. In Assignment 3, I discussed the publicly traded company, Bank of America Corporation, and how the corporation deals with competition and change. In this paper, I will discuss the government regulations for mergers, the possible merger that could occur, and how the merger could be profitable.

Explain why government regulation is or is not needed, citing the major reasons for government involvement in a market economy. Provide support for your explanation. Governmental regulation is highly important in today’s economy. There are federal and state regulations that are set to ensure the common wealth and beneficial care of the people. If a company was also involved in global marketing, they would need to…...

Similar Documents

Bank of America

...Internation Business Case Study Bank of Amerian and The Chinese Credit Card Market 1. How important is China to Bank of America? Did BOA do the right thing by taking a minority position in CCB? We considered that Bank of America’s taking minority position in CCB (9 percent, as stated from the case) is an adequate decision. Looking at the situation from the perspective of a firm in search for successful overseas expansion, we considered that CCB - one of the largest commercial banks in China - could serve as a profitable business partner. A big advantage is that CCB has relationships with many of the largest business groups and leading companies in industries strategically important to China's economy. Another is that CCB already has a big market share in the industry: 12.63% of credit card issued. Considering that work-site marketing is critical in issuing credit cards, this will play as a big advantage. Also it has the least non-performing loans, and because it is state-owned, CCB seems to be a very safe and rational choice. The Chinese credit card industry is described to be in the process of a very promising growth stage and provide the possibility for a successful expansion through first-mover advantage. Since its entry to WTO in 2001, China’s GDP has been growing at over 10% each year. This will result in higher purchasing powers of individuals which will promise growth for the industry. In the same sense, according to the case, 3 million credit cards had been...

Words: 2142 - Pages: 9

Bank of America

...business line spreading its platform to increase more market coverage.... 2. Case Analysis of Bank of America: Mobile Banking Case Analysis of Bank of America: Mobile Banking Marcus J. Durr Professor Trittipo AMBA 650 Section 9047 January 31, 2012 Abstract During the tough time for the banking industry when many banks have gone into bankruptcy or have began add numerous fees to their service in order to stay afloat; Bank of American (BoA) has also experienced some of the effects of the financial crisis. In an effort to weather the storm BoA began to incorporate mobile banking. While its competitors were implementing their own mobile banking through mobile apps, mobile web, and short message system (SMS), BoA focused on the mobile app and mobile web only. This case analysis takes a look at some of the major strategic issues and problems, such as BoA leaving out a portion of their target market by opting out of using SMS, which left a portion of their market base outside in the cold. However there are some positives, that BoA realized and took swift action to capitalize on the fast emerging market of mobile banking. In the conclusion, recommendations are given on what BoA can do to keep a stable position in the future, as mobile banking will have a huge impact on the banking industry. Case Analysis of Bank of America: Mobile Banking In the banking industry Bank of America has grown to become a household name and evidence of their marketing efforts through all......

Words: 1584 - Pages: 7

Bank of America

...Bank of America research paper Kim Adams Wilmington University Bank of America's history dates back to 1904, when Amadeo Giannini founded the Bank of Italy in San Francisco to cater to immigrants who were denied service from other banks. Shortly following the opening of Bank of Italy the San Francisco earthquake struck, causing most banks to halt all lending practices. Giannini managed to rescue funds to start lending within a few days of the disaster to those who was willing to rebuild. Bank of America was formed when Giannini consolidated his Bank of Italy with Bank of America. As of 2010, Bank of America is the 5th largest company in the United States by total revenue, as well as the second largest non-oil company in the U.S. (after Walmart). In 2010, Forbes listed Bank of America as the 3rd biggest company in the world. (CNN Money) As one can imagine, all industries from mom and pop stores to multi million corporations have felt the wrath of the economic downturn. To make the statement that any bank is performing desirably would be a slight exaggeration. Prior to the recession, banks (including Bank of America) were content with relaxed lending guidelines, contracting out any brokers, and questionable appraisers. The above noted coupled with American’s constant desire for more, set the United States up for a perfect storm. The share price, like the US banking market in general, has dipped significantly from its relatively recent highs. The last......

Words: 2595 - Pages: 11

Bank of America

...Bank of America 3/12/12 History of the company: The bank of America has become one the most well known banks in the world. In fact this success is due to it several historical merges, especially with the bank of Italy, founded by Amadeo Giannini in San Francisco in 1904. The founder and president of Bank of America agreed to the merging on 1929. It operated under the name Bank of America, and in 1958 the bank harnessed the technology that lets credit cars to be linked directly to bank accounts by introducing bankamericard, and this was the progenitor of VISA. Bank of America first expanded to the borders of California with its acquisition of Seattle-based Seafirst Corporation in 1983. From this, the company expanded in Idaho, Arizona, Washington and Oregon, and it was the largest in history. In 1998, the company was purchased by NationsBank, which moved the headquarters to charlotte North Carolina. The bank suffered serious losses when the director was not able to pay back the large hedge fund it loaned. NationsBank structured the purchase as a merger and renamed the merged company the bank of America Corporation. The company had assets totaling 570 billion dollars, with 4800 branches situated across 22 states. It is currently the largest bank in the United States. Comentario [RN3]: I got lost with the dates during your presentation. There are some more here, but the history could have been made clearer with specific dates and actions. Comentario [RN2]: This......

Words: 2133 - Pages: 9

Bank of America

...eleven thousand in 1984 to just over seven thousand in 2006. The average profitability of the largest banks grew to outstrip the profitability of the industry’s smallest banks; an outcome traceable to increased competition from bank and nonbank financial firms, new technology that reduced the advantage of banks having a local presence, and the development of services that could be offered over wider geographic areas (www.mheducation.com). A new type of financial-services holding company (FHC) was created in 1999 as a result of passage of the Gramm-Leach-Bliley (GLB) Act. Provided these entities hold strong capital positions and possess sound management, they are permitted to bring together under the same corporate umbrella, commercial banks, investment banks, insurance companies, and selected other affiliated companies that are “financial in nature” and “compatible” with banking (www.mheducation.com). The FHCs come closest to mirroring the organizational structures and service menus of leading European banks, such as Deutsche Bank AG of Frankfurt and HSBC Holdings based in London, by offering the broadest array of services of any financial-services provider (www.mheducation.com). With joint approval of the U.S. Treasury Department and the Federal Reserve Board the menu of services FHCs can offer may be expanded in the future. As the twenty-first century unfolded almost six hundred and fifty holding companies selling services in the United States, including both domestic......

Words: 2378 - Pages: 10

Bank of America

...Introduction: The Bank of America was formed in 1998 after the merger of California based Bank of America and the Nations Bank of North Carolina. At the end of the 20th century the bank stood as the second largest bank in the American market with close to 4500 branches operating in 21 states. Most of these branches were located in high growth markets of the south and west coast. Globally, it employed 1, 40,000 employees across 190 nations, over $8 billon in revenues, $360 billion in deposits and some $600 billon in assets. However the markets had been consolidating for sometime with the total number of banks in America having reduced to 7000 from an figure of 14000 first recorded in 1985. Intense competition characterized the market and the challenge for national banks was to be able to localize product and service offerings for their customers. Financial services had traditionally been looked upon as commodities by banks and lack of experimentation marked the sector. The sector was however slowly realizing that traditional methods of cost reduction and other control mechanisms could only take growth so far. ‘Organic Growth', a higher wallet share of existing customers was a concept of much relevance in the highly competitive market. For achieving this Bank of America had given more freedom to individual bank managers to undertake more responsibilities. Others like Washington Mutual (WAMU) had introduced new models of customer experience, benchmarking their services...

Words: 15439 - Pages: 62

Bank of America

...Design | Bank of America | Mobile Banking | | Ashlee BlairDaniel CareyStephanie FortnaBrandi Stricklin | 8/4/2011 | | Table of Contents * Introduction: Main Challenge ……………. 2 * Industry Description ……………………… 3 * Brand Analysis…………………………..... 8 * SWOT Analysis………………………….... 10 * Business Model …………………. ………. 13 * Digital Marketing ………………………… 16 * Suggested Solution ……………………….. 21 * Exhibits …………………………………… 23 * References ………………………………… 26 Introduction Bank of America launched mobile banking in May 2007. Mobile Banking lets customers easily and securely access balance information, pay bills with optional Bill Pay service, transfer funds, and find nearby ATMs and banking centers through a mobile application on their smartphones, and through mobile web on their phone browser. Main Challenge WHAT: Increasing overall growth in mobile banking in the financial services industry. Douglas Brown Senior Vice President of Mobile Product Development was quoted, “In less than 3 years we have four million mobile banking customers. That’s an adoption rate almost five to eight times that of our online banking several years ago.” Line-of-business managers are looking for leveraged mobile platforms to meet the needs of their specific businesses. The capabilities of mobile banking through the use of your smartphones or mobile web have become popular with today’s bank customers. WHO: * Jen McDonald, SVP of Bank of America......

Words: 5971 - Pages: 24

Bank of America

...RESEARCH & DESIGN Bank of America Mobile Banking Ashlee Blair Daniel Carey Stephanie Fortna Brandi Stricklin 8/4/2011   Table of Contents  Introduction: Main Challenge ……………. 2  Industry Description ……………………… 3  Brand Analysis…………………………..... 8  SWOT Analysis………………………….... 10  Business Model …………………. ………. 13  Digital Marketing ………………………… 16  Suggested Solution ……………………….. 21  Exhibits …………………………………… 23  References ………………………………… 26   Introduction Bank of America launched mobile banking in May 2007. Mobile Banking lets customers easily and securely access balance information, pay bills with optional Bill Pay service, transfer funds, and find nearby ATMs and banking centers through a mobile application on their smartphones, and through mobile web on their phone browser. Main Challenge WHAT: Increasing overall growth in mobile banking in the financial services industry. Douglas Brown Senior Vice President of Mobile Product Development was quoted, “In less than 3 years we have four million mobile banking customers. That’s an adoption rate almost five to eight times that of our online banking several years ago.” Line-of-business managers are looking for leveraged mobile platforms to meet the needs of their specific businesses. The capabilities of mobile banking through the use of your smartphones or mobile web have become popular with today’s bank customers. WHO: • Jen McDonald, SVP of Bank of America (Digital Marketing......

Words: 5890 - Pages: 24

Bank of America

...International Management II (Core Competencies) Case Study Bank of America (A) by Alexander Beil Christoph Hillgärtner Florian Schlegelmilch Harvard Case Study: Bank of America List of Contents 1. 2. 3. 4. 5. 6. 7. 8. 9. Introduction / Definitions Overview “Bank of America” Product development processes Strength and weaknesses of the systems Learning through experimentation Conclusion / Learnings Summary Questions for group discussion References 1 Harvard Case Study: Bank of America 1. Introduction / Definitions Description of the case study “Bank of America (A)” * The case study describes how Bank of America is creating a system for product and service innovation in its retail banking business. Emphasis is placed on the role of experimentation in some two-dozen real-life "laboratories" that serve as fully operating banking branches and as sites for testing new ideas and concepts. Focuses on: 1) 2) 3) how learning from experimentation can be maximized; incentive and reward systems that motivate employees to experiment in "life" environments; the challenges of managing innovation in an industry that eschews risks, failure, and change. *Reference: http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=603022 Harvard Case Study: Bank of America 1. Introduction / Definitions Process: which activities are to be taken, in which order* Organization: who (person, team or department) is involved (who is responsible for......

Words: 1164 - Pages: 5

Bank of America

...strategy assessment; and recommendations to the Bank of America on how to maintain and strenghen its competitive position. Paper Introduction: strategic Management analysis bank of america Introduction The report presents the findings of a strategic management analysis ofBank of America Corporation a financial services company that participatesin most facets of the financial services sector Bank of America is anationwide financial services company in the United States and the companyis the country's third largest banking company when measure by totalassets behind CitiGroup in first place and J P Morgan Chase in secondplace Hoover's Inc This report begins with an assessment of the external Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Reliability in Service|.2 |3 |.6 |4 |.8 |3 |.6 ||Delivery | | | | | | | ||2. 8 |4 |.32 ||customer acquisition system | | | ||6. High-level of consumer awareness|.1 |4 |.4 ||3. Strong and effective online |human resources management ||customer acquisition system | ||6. Bank of Americaranks somewhat ahead of J.P.......

Words: 1815 - Pages: 8

Bank of America

...Assignment 1: Bank of America April 26, 2015 Bank of America is one of the largest retail banking brand in the United States. Bank of America began as a small regional North Carolina National Bank and has become one of the largest companies in the world. Bank of America services individual consumers, small, middle market businesses and large corporations. 1. Outline the talent management program that led to success for the company. Bank of America has always been a leader in the financial services industry. Its philosophy of talent management and development is driven by seven guiding principles that create a mindset that is pervasive across the bank’s executive ranks. The seven different philosophies are stated below: 1. Leaders really do matter in managing and driving accountability, results and culture. 2. Performance rules: Top performers, then high potentials 3. Talent is an enterprise resource. 4. Today’s top-performing leaders are not necessarily tomorrow’s. 5. A broad set of experiences and assignments is the best classroom; yet, a balanced approach is necessary for development. 6. Today’s top 100 must leave a legacy of future talent by teaching, mentoring and serving as role models to others on what it takes to succeed. 7. Invest in the best and focus the rest. Bank of America’s talent management and development efforts are structured around a core set of frameworks that includes the Bank of America core values, a 70-20-10 development......

Words: 1520 - Pages: 7

Bank of America

...TP027192 INTAKE CODE: UC2F1501IBM BM061-3.5-2-BEG MODULE NAME: BUSINESS ETHICS GOVERNANCE TOPIC: BANK OF AMERICA’S MOST TOXIC ASSET (CASE B) INDIVIDUAL ASSIGNMENT LECTURER: FARAHIDA BINTI ABDUL JAAFAR DATE ASSIGNED: 06th MARCH 2015 DATE DUE: 17th APRIL 2015 Table of Contents INTRODUCTION. 3 Summary. 3 Ethical Dilemma. 3 Affected Stakeholders. 4 ANSWER FOR QUESTION 1. 4 ANSWER FOR QUESTION 2. 5 ANSWER FOR QUESTION 3. 6 ANSWER FOR QUESTION 4. 7 ANSWER FOR QUESTION 5. 8 ANSWER FOR QUESTION 6. 8 CONCLUSION. 9 REFERENCES. 10 BANK OF AMERICA’S MOST TOXIC ASSET (CASE B). INTRODUCTION. Summary. Ken Lewis was a Chief executive officer of Bank of America, he was appointed as American Banker’s "banker of the year "after purchasing Countrywide Financial and Merrill Lynch. The bank acquisition of Merrill Lynch in 2008 made Bank of America the world's largest wealth management Corporation and a major player in the investment banking market. The deals were applauded and made Ken Lewis even more worth being named as American Banker’s “banker of the year” During first week of January 2009 both Countrywide Financial and Merrill Lynch were bankrupt with assets in their balance sheet which set a new standard for toxicity in financial market, resulting in forfeiture for the bank and requiring financial assistance from the Federal Government. Bank of America was forced to welcoming U.S. taxpayers as the company’s largest shareholder. BOA stock was down by......

Words: 2993 - Pages: 12

Bank of America

...Bank of America’s CEO and Chairman Ken Lewis, in an effort to purchase Merrill Lynch at the cost of $50 billion misled shareholders by not disclosing all the facts pertaining to the merger. CEO and Chairman Ken Lewis could not have known the controversy and ramifications that would follow his deception or neglect. Or, as he stated himself, there was no intent of deception. The ethical issue here is whether or not Ken Lewis intentionally deceived the shareholders of Bank of America in order to acquire Merrill Lynch. Many question the ambitions of CEO Ken Lewis who had already acquired Countrywide Financial after their failure and now he is acquiring Merrill Lynch. It is reported that Lewis’ investment in Countrywide Financial was $2 billion and his takeover of Merrill Lynch was $44 billion. Reports say that over the last five years Mr. Lewis has spent $100 billion on acquisitions. (Bill Taylor) These acquisitions included MBNA, LaSalle Bank, Fleet Boston and U. S. Trust. It appears that Ken Lewis has built himself a nice little empire. The question here is whether Mr. Lewis acted unethical in his acquisition of Merrill Lynch. Did Ken Lewis bite off too much at the expense of others? We would need to look deeper into the circumstances surrounding his acquisition of Merrill Lynch. Merrill Lynch was a failing company and as part of Bank of America’s agreement to save it, the CEO of Merrill Lynch asked for bonuses for himself and other top management persons. At least 700 of......

Words: 1075 - Pages: 5

Bank of America

...05/10/2016 Research Paper-FINC 345 Bank of America Today, banks keep our money safe and are highly relied on when it comes to loans and financial securities. Bank of America is the second largest bank in the U.S. and the twenty-first largest company in the U.S. Bank of America is so popular today because of their great customer services and ease of access. When it comes to their technological trends, some of the benefits are their website, online banking capabilities, mobile app and text banking, and email and text alerts. When it comes to customer service, they have a customer service number and even online chat feature that comes with estimated wait times, and there are nearly 5,000 branches in 37 states. Therefore, they are conveniently located almost anywhere. When it comes to their financial aspects, they waive a $12 monthly maintenance fee if you make at least one direct deposit of $250 or more or if you maintain a daily balance of at least $1,500 or if you are a student younger than 23. They are very lenient and they even offer customers to choose between two overdraft options to determine how other transactions like checks and scheduled payments are handled. According to bankofamerica.com, their mission statement is “to offer lending and investment products that serve low and moderate income individuals and families, improve undeserved low and moderate income communities, and create sustainable practices for the long haul”. Bank of America is very unique in......

Words: 857 - Pages: 4

Bank of America

...Assignment #1 Bank of America Melissa Shuler February 14, 2012 HRM 532 Dr. Marie-Line Germain Outline the talent management program that led to success for the company. Before we can go into the talent management program that led to the success for the company we must know how the company began. The Bank of America was formed in 1904 when the founder of Bank of Italy, Amadeo Giannini which was solely out of San Francisco in an effort to cater to immigrants that were denied services by other banks based upon their status. According to the article there was a fire in 1906 that was caused by an earthquake that completely took out the bank. In order to make sure things were going to get back to the way they once were, Giannini handed out loans to those who were willing to help rebuild and hoped that things would get back to the way they were and then the loans were repaid (Goldsmith, 2010). Amadeo Giannini had ambitious plans to create a bank trading at a national level. He expanded BankAmerica operations into the western U.S. states, in the process moving into the insurance market (with the support of his holding company, the Transamerica Corporation). However, Giannini’s plans were somewhat thwarted by two factors. Firstly, BankAmerica and TransAmerica’s relationship was curtailed by the 1956 Bank Holding Company Act, which forbade banks from possessing non-banking organizations. Secondly, federal banking regulation dictated that banks should not be active......

Words: 1299 - Pages: 6

Kikaninchen Komm mit in meine Welt (1) | Narození | Watch What Happens Live with Andy Cohen Sun-Thurs 11/10c