A PROJECT REPORT ON INDUSTRIAL EXPOSURE

In partial fulfilment of the requirement for the award of degree of Bachelors in Business Administration (B.B.A.)

Submitted By: PRABHAT MITRA

Under the Guidance of: MS.CHINKI GOYAL

BHARATI VIDYAPEETHs INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI

ACKNOWLEDGEMENT

I am very thankful to everyone who all supported me, for I have completed my project effectively and more over on time. I am equally grateful to my teacher Ms.CHINKI GOEL, She gave me moral support and guided me in different matters regarding the topic. She had been very kind and patient while suggesting me the outlines of this project and correcting my doubts. I thank her for her overall supports. Last but not least I would like to thank my colleagues to lay their helpful hands whenever required.

PREFACE

A hallmark of any premier business school is its willingness and ability to constantly explore and implement new ideas and practices in the field of management education. Institute constantly reorients their programs in order to keep abreast of changing development. The initial interaction between school students and industry takes place when the students undergo project is usually for knowing the process for recruitment, selection, industrial relations & training of that institution. It is often the exposure to corporate culture that a student receives, particularly true for students without prior work experience. The main purpose of the study is to know the policies of the bank regarding recruitment, selection & training, which helped me in gaining knowledge about the different working pattern of different departments of the company.

CONTENTS Chapter 1: 1. 2. 3. 4. 5. Introduction to Company

Nature of Business Type & ownership Pattern Organizational Structure Production Lay out Organisational Policies Industrial Analysis

Chapter 2: 1. 2. 3.

Industry Overview (Growth rate of Industry, Contribution to GDP) Current Issues (From Newspaper, Journals For Company and Industry) Key Competitors

4. Environmental Scanning Political environment, Economic environment, Socio-Cultural Environment, technological environment, environmental issues (Green environment) and Legal environment. 5. Porters five forces model of competition Michael Porter Marketing Strategies

Chapter 3: 1. 2. 3. 4. 5.

Products of Company 4 Ps (Product: Price, Place & Promotion) STP (Segmentation, Targeting and Positioning) Distribution Channels Promotion Strategies Financial Analysis

Chapter 4: 1. 2. 3.

Sources of Finance Ratio Analysis Any 5 Net Profit/ Balance sheet (from annual report) -Analyse

Chapter 5: Key Learnings from the Company and Recommendations 1. 2. 3. Performance Analysis of the Company Reasons for the expansion/contraction/diversification of Company Comment on Organizational Leadership

4. 5.

Market share/growth rate of Company SWOT Analysis of the Company Findings Conclusions and Suggestions

Chapter 6: Chapter 7: Bibliography

EXECUTIVE SUMMARY The objective of this project was to analyze the financial statements with special reference to BANK OF AMERICA CONTINUUM SOLUTIONS PVT LTD. international businesss A Continuum Solutions Private Limited is a wholly owned subsidiary of BanK of America Management Corporation, set up under Bank of
America's Global Delivery Model. It functions as a dedicated banking back office operations partner, providing the global back-end for services in the Global Corporate Investment Banking (GCIB) as well as Consumer Banking spectrum. B A Continuum transcends routine BPO operations, offering employees exciting opportunities in high-end banking transaction processing in a wide spectrum ranging from Trade Finance, Treasury Management, Cards Management, Corporate Investment Banking, Equity Research etc. As a dedicated Banking Back Office, the complexity and value generation of the operations that they carry out at B A Continuum are vastly enriching. It focuses on the core banking operations in the complex and challenging Financial Services domain, supporting critical processes in the following core domains, across US, Europe and Asia Pacific: Global Treasury Services & Treasury Management Foreign Exchange Operations Equity Research Trade Finance Cards Exception Management Customer Service & Support Mortgage Services Providing effective services in this context entails a mix of functional, industry-specific knowledge and skills and an up-to-date, analytical understanding of the business environment and requirements in each specific location in addition to standard BPO skills. Working at B A Continuum involves a unique mix of skills and abilities, which also translate into unique skills, attitudes and behaviors and opportunities for the right person.

The project starts off with the BANK OF AMERICAS financial statements of 2009 and comparing it to the previous four years i.e. 2008, 2007, 2006, 2005, about its performance in the last few years, highlighting the risks associated with it. It gives an overview of the present position of Bank Of America. The initial analysis basically starts off with the financial highlights of the year 2009, THE BALANCE SHEET for the year 2009 working out required

ratios which are required for the comparison within the firm with the last four years and
then working out the required graphs and pie charts to make the analysis more simpler and easier to understand.

OBJECTIVE The objective of this project was to analyze the financial growth of BANK OF AMERICA CONTINUUM SOLUTIONS PVT LTD. Also the research was carried out comprehensively in order to understand increase of BANK OF AMERICAS CONTINUUM SOLUTION PVT LTD. performance region wise. It also tries to analyse the need gaps of the firm in terms of its finance and depicts about the various services provided by it in order to carry out its business. The primary object of this project was to find out:1. To understand BANK OF AMERICA CONTINUUM SOLUTIONS PVT LTD. financial position in the market. 2. To identify the parameters on which the BANK OF AMERICA CONTINUUM SOLUTIONS PVT LTD growth 3. To find the services being offered by BANK OF AMERICA CONTINUUM SOLUTIONS PVT LTD this makes it the leader in the market

INTRODUCTION CHAPTER-1

Nature of business

BANK OF AMERICA

BANK OF AMERICAS CONTINUUM SOLUTIONS PVT LTD B A Continuum Solutions Private Limited is a wholly owned subsidiary of Banc of America Management Corporation, set up under Bank of America's Global Delivery Model. We function as a dedicated banking back office operations partner, providing the global back-end for services in the Global Corporate Investment Banking (GCIB) as well as Consumer Banking spectrum. B A Continuum transcends routine BPO operations, offering employees exciting opportunities in high-end banking transaction processing in a wide spectrum ranging from Trade Finance, Treasury Management, Cards Management, Corporate Investment Banking, Equity Research etc. As a dedicated Banking Back Office, the complexity and value generation of the operations that we carry out at B A Continuum are vastly enriching. We focus on core banking operations in the complex and challenging Financial Services domain, supporting critical processes in the following core domains, across US, Europe and Asia Pacific: Global Treasury Services & Treasury Management Foreign Exchange Operations Equity Research Trade Finance Cards Exception Management Customer Service & Support Mortgage Services Providing effective services in this context entails a mix of functional, industry-specific knowledge and skills and an up-to-date, analytical understanding of the business environment and requirements in each specific location in addition to standard BPO skills. Working at B A Continuum involves a unique mix of skills and abilities, which also translate into unique skills, attitudes and behaviors and opportunities for the right person. The subsidiary helps the bank to remain competitive in the global market and to grow in the
U.S. and abroad,. Bank of America is the latest multinational bank to outsource back-office operations to

India. The bank already outsourcers software development work to Indian software companies such as Infosys Technologies Ltd. in Bangalore and Tata Consultancy Services in Mumbai. . U.S. banks, brokerage firms, insurance companies, mutual fund and other financial services firms are planning to relocate more than 500,000 jobs offshore, representing 8% of their workforces, over the next five years, according to a study conducted last year by the management consultancy A.T. Kearney Inc. in Plano, Texas Continuum Solutions is part of Bank of America's Global Delivery Center of Expertise, which is responsible for all of the bank's offshore outsourcing activities. The back-office support provided by Continuum will be a mix of transaction processing and high-end complex processing. B A Continuum transcends routine BPO operations, offering employees exciting opportunities in high-end banking transaction processing in a wide spectrum ranging from Trade Finance, Treasury Management,Cards Management, Corporate Investment Banking, Equity Research etc. As a dedicated Banking Back Office, the complexity and value generation of the operations that we carry out at B A Continuum are vastly enriching. We focus on core banking operations in the complex and challenging Financial Services domain, supporting critical processes in the following core domains, across US, Europe and Asia Pacific: Global Treasury Services & Treasury Management Foreign Exchange Operations Equity Research Trade Finance Cards Exception Management Customer Service & Support Mortgage Services Providing effective services in this context entails a mix of functional, industry-specific knowledge and skills and an up-to-date, analytical understanding of the business environment and requirements in each specific location in addition to standard BPO skills. Working at B A Continuum involves a unique mix of skills and abilities, which also translate into unique skills, attitudes and behaviors and opportunities for the right person.

Bank of America The largest commercial bank in the US in terms of deposits, the largest Americancompany in terms of market capitalization and largest company of its kind in the world,the Bank of America Corporation (B&A) is one of the biggest financial holding companies, which offers banking and non-banking services locally and internationally. Itfocuses on consumer and small business banking, global corporate and investment andglobal wealth and investment management. (Loosvelt, D. 2006) Founded in 1874, it wasoriginally known as the Nations Bank till its acquisition of a San Francisco-based Bankof America in which it assumed its current name.The Bank of America is the leading financial institution in the US. It is second-largestbank in terms of assets. It has the most extensive branch network covering some 30states from coast to coast. In terms of profitability, it has a profit margin of 31.61%. Onthe other hand, the efficiency of its management can be reflected on its 16.6% return onequity. Major weaknesses of the bank stem out from its financial policies (e.g. accountclosures without

warning and prioritization in the clearing of biggest checks; withholdingcustomers' direct deposit to cover debts); human resource policies (e.g. charges of racialdiscrimination in wage, promotion and training); and flaws in its online banking services(e.g. website redirection weakness; ineffective site key security) According to its present Chairman, CEO and President, Kenneth D. Lewis, the mission of Bank of America is to build vivacious and attractive communities where opportunities abound for all people through the astute integration of human and financial capital.Under this premise, the mission of the organizations immediately underscores the criticalrole of human resource in attaining the organizations objectives. The success of thecorporation relies heavily on the human capital. The Human Resource DepartmentEmployees define an organization. In the case of Bank of America, their humanresources are also an essential ingredient for the accomplishment of the mission. Thus,stress and emphasis has to be given to this particular resource by employing strategies that would adhere to the strong principles and philosophies for progress and development of the people at work. This is to be done to ensure of achieving the very same goal for the company. The sure way of focusing on this issue is to value the person at work. It isimportant to understand the nature of the workforce as well as his needs and the motivethat he has. The Human Resource Department (HRD) is the specialized department that handles alladministrative needs of the people in the organization. Its primary role is to implementthe organization function of management, includes the performance of the recruitment ofthe manpower needs of the organization, design and conduct of manpower development,formulation of compensation and other benefits; implementation of safety and healthissues and maintenance of employee and labor relations.Individual developmentThe high regard and support of the company towards individual development oforganizational employees is reflected in the benefits that every Bank employee is entitledto. First of all, Bank of America adopts a policy of equal employment opportunity thus opening its doors to all potential employees regardless of race, religion, color, sex, sexualorientation, gender, age, national origin, ancestry,

10

citizenship, veteran or disability statusor any other factor prohibited by law.Job Design. In terms of job design, it implements job rotation and job enlargementwithin its local branches so that jobs are designed to be a channel for one to assert his/ herpersonality or as a form of continuing education that allows for employees to improvethemselves. Apparently, because job rotation in the routine functions of personnel in thebank open rooms for diversity which make work more interesting. Work becomes aninstrument by which an employees potentials are drawn out and tested. Challengescoerce an employee to utilize personal resources that give opportunities for selfimprovement and development. Every individual seeks his being productive in the use ofhis mind and creativity. Through job rotation and enlargement, work becomes interestingand challenging. A person gets occupied in a real sense when he has the opportunity to use whatever knowledge he already has or when he is forced to acquire newer knowledge in order to resolve a problematic situation confronting him. He escapes boredom and his work becomes worthwhile. He can then think positively, viewing problems not as burdens that bear him down but as challenges that can lead him to greater achievements. This will make him diligent, for the reason not only because he loves his work but also because he is ever on the look-out for better wages and means of solving problems and meeting challenges. Compensation. Employees commonly depend on the monetary compensation of a job in order to make a living. The job pay should therefore be a commensurate remuneration sufficient for an employee to pay for his personal and familys basic needs. Basic needs cover not only food, clothing and shelter, but also health and personal care, education, rest and recreation. For instance, Bank of America offers healthcare plans, a variety of medical, dental and vision plans; Insurance plans that provides income replacement in the event of serious injury or emergency cases; Reimbursement accounts which help in reducing health care costs; Retirement plans, a voluntary savings plan including a company funded pension plan. Work-Life Balance. Furthermore, Bank of American has further devised ways to compensate their employees in the form of fringe benefits. Among the many strategies employed the progress and development of the people at work is to recognize and

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maintain their employees role as parents as well. Bank of America offer benefits that are supportive of their employees familial or personal responsibilities. Among the common policies adopted to support and recognize the evolving needs of employees in relation to their personal and familial life are counseling programs that assist employees on matters regarding personal life and provision of child and eldercare services so that employees can attend their familial obligations while at work. The company also employs flexible work arrangements as telecommuting, compressed workweeks, flextime, so that employees can further balance their responsibilities. Other Benefits. Because the banks employees are themselves similar to the people or customers that the bank serves, they are furthermore entitled to certain discounts in case they want to avail of companys products and services including Housing loans, Commuter benefits, disability loans, and educational partnerships, among many others. Career Development Career development of employees is addressed in two ways: the establishment of a standard career path that ensures growth or promotion of an employee and through personnel training. Career Development in Bank of America is an interlocked structure consisted of three critical facilitators namely the associates, managers and the organization. The first functions as the driver, second as facilitator in the process and the organization as the overall enabler. This framework is allied on the principle of 'the right person for the right job', which creates an environment in which the employees individual needs conforms and compliments the needs of the organization. A common strategy employed by companies designed to ensure commitment of members/ employees to organizations/ companies are geared towards the individual empowerment and success of each employee by investing in employee education and training. Aside from keeping employees abreast with job changes brought about by technology, it makes them more productive and allows them to grow professionally.

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The first step in the training design process is conducting a needs assessment. Strategic training and development initiatives should be committed to writing in the company's business strategy that is based on the business environment, and the company's goals and resources. The effectiveness of training highly depends on the needs of both the organization and its employees. There are common training needs of organizations which must be addressed based on the very nature of the organization as a group of people and based on its need to survive in the modernizing trends in its environment i.e. embrace of new technology. Aside from company sponsored employee training and seminars, Bank of America also provides the opportunity for its employees to follow their inherent capacities and inclinations to create a more rewarding career through MBA Education Program and Tuition reimbursement policy; Internal job postings, which allows growth opportunities across functions; and the assignment or voluntary involvement in communities of interest. Leadership Training. A big company like the Bank of America has nowhere else to go but to expand. Since 1998, it has principally pursued its expansion programs by acquisition of existing financial institutions and other companies, to wit: northeastern banking behemoth Fleet Boston; credit card giant MBNA; U.S. Trust; ABN AMRO North and LaSalle Bank among others. (American Bar Association, 2007). Whenever the bank pursues an expansion project through the acquisition of a financial institution, manpower leadership training always becomes necessary for two basic reasons: the need to learn the integration of the policies, strategies and operations of the merging companies and the opportunities for existing personnel of Bank of America to get promoted in leadership, managerial and supervisory roles or positions in the assimilation of the acquired company and implementation of the core values and strategic

operations of the Bank of America.

On other hand, the need for Bank of America to address the weaknesses of its online banking services entails continuous training and development in terms of
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operations and technical expertise for its technical maintenance and online banking personnel to ensure that they remain abreast to any changes or advances in information technology. Bank of America requires leadership training program for its consolidation projects with other companies. Bank of America set the qualities of a successful leader as follows: a focus on business growth; ability to lead; ability to execute; optimism; and upholding company values. (Fulmer, R.M. and Conger, J.A., 2004) Key competencies must be well defined in each category. For instance, deep/broad financial management and functional skills is necessary for growing business and the ability to create competitive and innovative business plans. In terms of leadership performance, the ability to align enterprise capabilities, leverages teams to drive performance and inspire commitment is included. The need to instill management focus and discipline, build partnerships or make swift sound decisions are competencies for driving execution. Organizational Development The process in which managers develop or change their organizations structure is calledorganization design, which is primarily carried out to define the work specialization of every organizational component. Any organization starts with a simple structure, where in individual roles are basically defined. There is no single type of organizational structure that is most effective. Organizational design depends on the objectives of the organization and follows the strategy the organization adopts to achieve that objective. Organizational design depends completely on how well it matches the particularenvironment and strategy. (Roberts, J. 2004) Different factors and circumstances are considered in designing organization such as the stability or innovative demands of the business environment. To complement or supplement the training and development needs of Bank of America based on targeted results, it also created an organizational design that is dynamic organization ideal in order for creating a learning organization that encourage and provide employees the capacity to learn and to change more quickly. In today's economy,

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an organization must be open and receptive to changes to adapt to the challenges of the constantly changing environment in which it thrive in order to remain responsive to the needs of the clients it serves. An organizations strategy must be adapted to changes in its competitive environment. This sometimes requires strategic change that creates the need for restructuring the organization to acquire new and different knowledge, skills and abilities. Technology also affects organizational design. For instance, computerization usually results into streamlining the organization by downsizing. Computerization also synergizes function which entail merging separate units. The creation of a learning culture in Bank of America starts from the proper communication of the expectation that employees should take to enhance their skills and remain at the competitive edge in their professional expertise. It also provides the necessary resources, facilities and training to support this goal. The bank also impart to employees the specific needs of the company with which they to reconcile or balance individual and company objectives. Finally, such set up is properly inculcated to potential as well as new employees through wide information dissemination. The Bank of America website for one great resource of learning the cultural orientation that Bank of America would like to introduce. Performance Management Perform well and get rewarded. This is the underlying philosophy of Bank of America. Employees are rewarded for hard work. The Performance Management System is constituted by joint developmental needs identification during pay for performance cycle; continued coaching & feedback from supervisor and merit promotion system in which an employee can progress faster depending on performance and potential. Moreover, Bank of America treats their workers like their valuable clients. It keeps in mind that the human resources are the major assets that constitute the organization or the company. All employees should be treated equally in terms of work amount, just remuneration and opportunities to grow. In the same manner, any form of prejudice or favoritism would be detrimental to maintaining fairness and equality among employees.

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Finally, management and every employee recognize the crucial role each one plays in the achievement of the organizational objectives. Opportunities for employees to work interdependently are created which further help connect and improve communication and development of work teams. Evaluation The Bank also has a standard performance appraisal system by which all employees are fairly evaluated. This apparently includes typical criteria like absenteeism, courtesy among others. However, the Bank is more results oriented and gives more weight to an employees outputs, accomplishments and productivity. This is apparently in line with their perform well and get rewarded Bank of America employs a nuance of empowerment evaluation where evaluation is democratized through the participation of employees. Instead of focusing on management alone, this approach focuses on decisions that emanates from a democratic process or based on the diffusion of power. (Fetter man, D. M., 2001). Empowerment evaluation is self-evaluation and reflection to help improve programs. People involved are empowered to conduct self evaluation at the same time a supervisor or boss coaches or helps facilitate the process. As such, this participatory evaluation creates a learning process for the recipients of the program that will help them reach their desired goals on a step by step process. Empowerment evaluation is a process controlled by people and done for the people. It is something they themselves undertake as a formal reflective method for their own development and empowerment. Role of practitioners Using the internal leadership and career development system of Bank of America may not be adequate considering the comprehensiveness of developing the key competencies required by the training. Also, in consideration of the magnitude and dispersed personnel of the company i.e. located in branches, there is a need to outsource or tap the expertise of external training service providers in order to meet the training demands in the most cost effective and fastest way. For one, online or web-based customized training must be developed in order to reach training participants the fastest way. In considering an external training provider, Bank of America must

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carefully evaluate the external trainings capacity and ability to deliver its requirements. The major requirements includes: the ability of the trainer to define success from the customers (B&A) perspective (Sosa, J., 2004); development of success measures; consistency of internal success metrics with customer success metrics; expectation and success validity; among others. The external trainer must be able to address the following issues: development and design of a customized curriculum that will meet the needs of B&A; incorporation of existing learning content and tools to integrate organization-specific language, concepts, and competency model; training of internal facilitators from the company to be training resources; and conduct of training effectiveness and assessment to verify skill improvement. Conclusion The human resource department is an integral part of any organization. This is especially in the case of Bank of America where the human resource is at the core of its mission. Taking care of the human resource is of utmost important because it is the people who make up the organization and it is the people who actually bridge the objectives of the organization into action. The people are an important resource in any organization because they are the major source of ideas and active executers of service of any organization. The Bank of America HR department plays a critical role in managing the general welfare of the employees because the organization itself is the microcosm of the society it aims to build. Thus, it formulates its policies in such a way to reflect the ideal

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BANK OF AMERICA CORPORATION TYPE

NYSE: BAC TYO: 8648 DOW JONES INDUSTRIAL AVERAGE COMPONENTS PUBLIC

INDUSTRTY
FINANCIAL SERVICES INDUSTRIAL SERVICES

BANKING

FOUNDED

BANK OF ITALY (1904), NATIONS BANKS(1874)

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HEADQUARTERS

CHARLOT, NC UNITED STATES

KEY PEOPLE
board BRYAIN MONYEHAN, Ceo and President

CHARELS O HOLIDAY, Chairman of the

AREA SERVED

WORLDWIDE

PRODUCTS CONSUMER BANKING CORPORATE BANKING INVESTMENT BANKING INEVESTMENT MANAGEMENT

PRIVATE EQUITY GLOBAL WEALTH MANAGEMENT MORTGAGE CREDIT CARDS

FINANCE AND INSURANCE

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REVENUE

$150.45 billion (2009)

NET INCOME

$6.276 billion (2009)

TOTAL ASSET

$2.223 trillion (2009)

TOTAL EQUITY

$231.444 billion (2009)

EMPLOYEES

282,408 (June 2009)

CORPORATE HISTORY BANK OF ITALY Bank of America's history dates to 1904, when Amadeo Giannini founded the Bank of Italy in San Francisco, for the purpose of catering to immigrants other banks would not serve.[23][24] Amadeo was raised by the Fava/Stanghellini family when his father was shot while trying to collect on a $10.00 debt. [citation needed] When the 1906 San Francisco earthquake struck, Giannini was able to get all of the deposits out of the bank building and away from the fires. Because San Francisco's banks were in smoldering ruins and unable to open their vaults, Giannini was able to use the rescued funds to start lending within a few days of the disaster. From a makeshift desk of a few planks over two

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barrels, he lent money to anyone who was willing to rebuild. He took great pride in later years that all of these loans were repaid. In 1922, Giannini established Bank of America and Italy[25] in Italy by buying Banca dell'Italia Meridionale,[26] itself only established in 1918.[27][28]

March 7, 1927, Mr. Giannini consolidated his Bank of Italy (101 branches) with the then newly formed Liberty Bank of America (175 branches). The result was the Bank of Italy National Trust & Savings Association with capital of $30,000,000, resources of $115,000,000. In 1928, A. P. Giannini merged with Bank of America Los Angeles and consolidated it with his other bank holdings to create what would become the largest banking institution in the country. He renamed his Bank of Italy November 3, 1930, calling it Bank of America. The merger was completed in early 1929[29] and took the name Bank of America. The combined company was headed by Giannini with Orra E. Monnette serving as co-Chair.

GROWTH IN CALIFORNIA Giannini sought to build a national bank, expanding into most of the western states as well as into the insurance industry, under the aegis of his holding company, Transamerica Corporation. In 1953, regulators succeeded in forcing the separation of Transamerica Corporation and Bank of America under the Clayton Antitrust Act.[30] The passage of the Bank Holding Company Act of 1956 prohibited banks from owning non-banking subsidiaries such as insurance companies. Bank of America and Transamerica were separated, with the latter company continuing in the insurance business. However, federal banking regulators prohibited Bank of America's interstate banking activity, and Bank of America's domestic banks outside California were forced into a separate company that eventually became First Interstate Bancorp, which was acquired by Wells Fargo and Company in 1996. It was not until the 1980s with a change in federal banking legislation and regulation
that Bank of America was again able to expand its domestic consumer banking activity outside California.

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New technologies also allowed credit cards to be linked directly to individual bank accounts. In 1958, the bank introduced the BankAmericard, which changed its name to VISA in 1975.[31] A consortium of other California banks introduced Master Charge (now MasterCard) to compete with BankAmericard.

EXPANSION OUTSIDE CALIFORNIA Following the passage of the Bank Holding Company Act of 1967, BankAmerica Corporation was established for the purpose of owning Bank of America and its subsidiaries. BankAmerica expanded outside California in 1983 with its acquisition of Seafirst Corporation of Seattle, Washington, and its wholly owned banking subsidiary, SeattleFirst National Bank. Seafirst was at risk of seizure by the federal government after becoming insolvent due to a series of bad loans to the oil industry. BankAmerica continued to operate its new subsidiary as Seafirst rather than Bank of America until the 1998 merger with NationsBank. BankAmerica was dealt huge losses in 1986 and 1987 by the placement of a series of bad loans in the Third World, particularly in Latin America. The company fired its CEO, Sam Armacost. Though Armacost blamed the problems on his predecessor, A.W. (Tom) Clausen, Clausen was appointed to replace Armacost. The losses resulted in a huge decline of BankAmerica stock, making it vulnerable to a hostile takeover. First Interstate Bancorp of Los Angeles (which had originated from banks once owned by BankAmerica), launched such a bid in the fall of 1986, although BankAmerica rebuffed it, mostly by selling operations. It sold its FinanceAmerica subsidiary to Chrysler and the brokerage firm Charles Schwab and Co. back to Mr. Schwab. It also sold Bank of America and Italy to Deutsche Bank. By the time of the 1987 stock market crash, BankAmerica's share price had fallen to $8, but by 1992 it had rebounded mightily to become one of the biggest gainers of that half-decade. BankAmerica's next big acquisition came in 1992. The company acquired its California rival, Security Pacific Corporation and its subsidiary Security Pacific National Bank in California and other banks in Arizona, Idaho, Oregon, and Washington (which Security Pacific had acquired in a series of acquisitions in the late 1980s). This was, at the time,
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the largest bank acquisition in history. Federal regulators, however, forced the sale of roughly half of Security Pacific's Washington subsidiary, the former Rainier Bank, as the combination of Seafirst and Security Pacific Washington would have given BankAmerica too large a share of the market in that state. The Washington branches were divided and sold off to West One Bancorp (now U.S. Bancorp) and KeyBank.[32] Later that year, BankAmerica expanded into Nevada by acquiring Valley Bank of Nevada. In 1994, BankAmerica acquired the Continental Illinois National Bank and Trust Co. of Chicago, which had become federally owned as part of the same oil industry debacle emanating from Oklahoma City's Penn Square Bank, that had brought down numerous financial institutions including Seafirst. At the time, no bank had the resources to bail out Continental, so the federal government operated the bank for nearly a decade. Illinois at that time regulated branch banking extremely heavily, so Bank of America Illinois was a single-unit bank until the 21st century. BankAmerica moved its national lending department to Chicago in an effort to establish a financial beachhead in the region. These mergers helped BankAmerica Corporation to once again become the largest U.S. bank holding company in terms of deposits, but the company fell to second place in 1997 behind fast-growing NationsBank Corporation, and to third in 1998 behind North Carolina's First Union Corp.
On the capital markets side, the acquisition of Continental Illinois helped BankAmerica to build a leveraged finance origination and distribution business (Continental Illinois had extensive leveraged lending relationships) which allowed the firms existing broker-dealer, BancAmerica Securities (originally named BA Securities), to become a full-service franchise. [33][34] In addition, in 1997, BankAmerica acquired Robertson Stephens, a San Francisco-based investment bank specializing in high technology for $540 million. Robertson Stephens was integrated into BancAmerica Securities and the combined subsidiary was renamed BancAmerica Robertson Stephens.[35]

MEGER OF NATIONS BANK AND BANK OF AMERICA In 1997, BankAmerica lent D. E. Shaw & Co., a large hedge fund, $1.4bn so that the hedge fund would run various businesses for the bank. However, D.E. Shaw suffered significant loss after the 1998 Russia bond default. BankAmerica was acquired by NationsBank in
October of 1998.

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The purchase of BankAmerica Corp. by NationsBank Corporation was the largest bank acquisition in history at that time. While the deal was technically a purchase of BankAmerica Corporation by NationsBank, the deal was structured as merger with NationsBank renamed to Bank of America Corporation, and Bank of America NT&SA changing its name to Bank of America, N.A. as the remaining legal bank entity. The bank still operates under Federal Charter 13044, which was granted to Giannini's

Bank of Italy on March 1, 1927. However, SEC filings before 1998 are listed under NationsBank, not BankAmerica. Following the US$64.8 billion acquisition of BankAmerica by NationsBank, the resulting Bank of America had combined assets of US$570 billion, as well as 4,800 branches in 22
states. Despite the mammoth size of the two companies, federal regulators insisted only upon the divestiture of 13 branches in New Mexico, in towns that would be left with only a single bank following the combination. This is because branch divestitures are only required if the combined company will have a larger than 25% FDIC deposit market share in a particular state or 10% deposit market share overall. In addition, the combined broker-dealer, created from the integration of BancAmerica Robertson Stephens and NationsBanc Montgomery Securities, was renamed Banc of America Securities in 1998.[36]

HISTORY SINCE 2001 In 2001, Bank of America CEO and chairman Hugh McColl stepped down and named Ken Lewis as his successor.
In 2004, Bank of America announced it would purchase Boston-based bank FleetBoston Financial for $47 billion in cash and stock.[37] By merging with Bank of America, all of its banks and branches were given the Bank of America logo. At the time of merger, FleetBoston was the seventh largest bank in United States with $197 billion in assets, over 20 million customers and revenue of $12 billion.[37] Hundreds of FleetBoston workers lost their jobs or were demoted, according to the Boston Globe.

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On 30 June 2005, Bank of America announced it would purchase credit card giant MBNA for $35 billion in cash and stock. The Federal Reserve Board gave final approval to the merger on 15 December 2005, and the merger closed on 1 January 2006. The acquisition of MBNA provided Bank of America a leading credit card issuer at home and abroad. The combined Bank of America Card Services organization, including the former MBNA, had more than 40 million U.S. accounts and nearly $140 billion in outstanding balances. Under Bank of America the operation was renamed FIA Card Services. In May 2006, Bank of America and Banco Ita (Investimentos Ita S.A.) entered into an acquisition agreement through which Ita agreed to acquire BankBoston's operations in Brazil and was granted an exclusive right to purchase Bank of America's operations in Chile and Uruguay. A deal was signed in August 2006 under which Ita agreed to purchase Bank of
America's operations in Chile and Uruguay. Prior to the transaction, BankBoston's Brazilian operations included asset management, private banking, a credit card portfolio, and small, middle-market, and large corporate segments. It had 66 branches and 203,000 clients in Brazil. BankBoston in Chile had 44 branches and 58,000 clients and in Uruguay it had 15 branches. In addition, there was a credit card company, OCA, in Uruguay, which had 23 branches. BankBoston N.A. in Uruguay, together with OCA, jointly served 372,000 clients. While the BankBoston name and trademarks were not part of the transaction, as part of the sale agreement, they cannot be used by Bank of America in Brazil, Chile or Uruguay following the transactions. Hence, the BankBoston name has disappeared from Brazil, Chile and Uruguay. The Ita stock received by Bank of America in the transactions has allowed Bank of America's stake in Ita to reach 11.51%. Banco de Boston de Brazil had been founded in 1947. On 20 November 2006, Bank of America announced the purchase of The United States Trust Company for $3.3 billion, from the Charles Schwab Corporation. US Trust had about $100 billion of assets under management and over 150 years of experience. The deal closed 1 July 2007.[38]

On September 14, 2007, Bank of America won approval from the Federal Reserve to acquire LaSalle Bank Corporation from Netherlands's ABN AMRO for $21 billion. With this combination Bank of America will have 1.7 trillion in assets. A Dutch court blocked the
sale until it was later approved in July. The acquisition was completed on October 1, 2007. The deal increased Bank of America's presence in Illinois, Michigan, and Indiana by 411 branches, 17,000 commercial bank clients, 1.4 million retail customers, and 1,500 ATMs. Bank of America has become the

25

largest bank in the Chicago market with 197 offices and 14% of the deposit share, passing up JPMorgan Chase.

LaSalle Bank and LaSalle Bank Midwest branches adopted the Bank of America name on 5 May 2008.[39]
Ken Lewis resigned as of December 31, 2009, in part due to controversy and legal investigations concerning the purchase of Merill Lynch, and Brian Moynihan became President and CEO effective January 1, 2010. After Moynihan assumed control, credit card charge offs and delinquencies declined in January. Bank of America also repaid the US$45 billion it had received from the Troubled Assets Relief Program.[40][41]

ACQUISITION OF COUNTRYWIDE FINANCIAL On August 23, 2007 the company announced a $2 billion repurchase agreement for Countrywide Financial. This purchase of preferred stock was arranged to provide a return on investment of 7.25% per annum and provided the option to purchase common stock at a price of $18 per share.[42] On January 11, 2008, Bank of America announced they would buy Countrywide Financial for $4.1 billion.[43] In March 2008, it was reported that the FBI was investigating Countrywide for possible fraud relating to home loans and mortgages.[44] This news did not stop the acquisition, which was completed in July 2008,[45] giving the bank a substantial market share of the mortgage business, and access to Countrywide's resources for servicing mortgages.[46] The acquisition was seen as preventing a potential bankruptcy for Countrywide. Countrywide, however, denied that it was close to bankruptcy. Countrywide provided mortgage servicing for nine million mortgages valued at US$1.4 trillion as of December 31, 2007.[47] This purchase made Bank of America Corporation the USA's leading mortgage originator and servicer, controlling 2025% of the home loan market.[48] The deal was structured to
merge Countrywide with the Red Oak Merger Corporation, which Bank of America created as an independent subsidiary. It has been suggested that the deal was structured this way to prevent a potential bankruptcy stemming from large

26

losses in Countrywide hurting the parent organization by keeping Countrywide bankruptcy remote.[49] Countrywide Financial has changed its name to Bank of America Home Loans.

ACQUISITION OF MERRIL LYNCH On September 14, 2008, Bank of America announced its intentions to purchase Merrill Lynch & Co., Inc. in an all-stock deal worth approximately $50 billion. Merrill Lynch was at the time within days of collapse, and the acquisition effectively saved Merrill from bankruptcy.[50] Around the same time Bank of America was reportedly also in talks to purchase Lehman Brothers, however a lack of government guarantees caused the bank to abandon talks with Lehman.[51] Lehman Brothers filed for bankruptcy the same day Bank of America announced its plans to acquire Merrill Lynch.[52] This acquisition made Bank of America the largest financial services company in the world.[53] Temasek Holdings, the largest shareholder of Merrill Lynch & Co., Inc., briefly became one of the largest shareholders of Bank of America,[54], with a 3% stake. However, taking a loss Reuters estimated at $3Bn, the Singapore sovereign wealth fund sold its whole stake in Bank of America in 1st q., 2009.[55] Shareholders of both companies approved the acquisition on December 5, 2008, and the deal closed January 1, 2009.[56] Bank of America had planned to retain various members of Thain's management team after the merger.[57] However, after Thain was removed from his position, most of his allies left. The departure of Nelson Chai, who had been named Asia-Pacific president, left just one of Thain's hires in place, Tom Montag as head of sales and trading.[58] The Bank, in its January 16, 2009 earnings release, revealed massive losses at Merrill Lynch in the fourth quarter, which necessitated an infusion of money that had previously been negotiated[59] with the government as part of the government-persuaded deal for the Bank to acquire Merrill. Merrill recorded an operating loss of $21.5 billion in the quarter, mainly in its sales and trading operations, led by Tom Montag. The Bank also disclosed it tried to abandon the deal in December after the extent of Merrill's trading losses surfaced, but was compelled to complete the merger by the U.S. government. The Bank's stock price sank to $7.18, its lowest level in 17 years, after announcing earnings
27

and the Merrill mishap. The market capitalization of Bank of America, including Merrill Lynch, was then $45 billion, less than the

$50 billion it offered for Merrill just four months earlier, and down $108 billion from the merger announcement. Bank of America CEO Kenneth Lewis testified before Congress[13] that he had some misgivings about the acquisition of Merrill Lynch, and that federal officials pressured him to proceed with the deal or face losing his job and endangering the bank's relationship with federal regulators.[60] Lewis' statement is backed up in internal emails subpoenaed by Republican lawmakers on the House Oversight Committee.[61] In one of the emails, Richmond Federal Reserve President Jeffrey Lacker threatened that if the acquisition did not go through, and later Bank of America were forced to request federal assistance, the management of Bank of America would be "gone". Other emails, read by Congressman Dennis Kucinich during the course of Lewis' testimony, state that Mr. Lewis had foreseen the outrage from his shareholders that the purchase of Merrill would cause, and asked government regulators to issue a letter stating that the government had ordered him to complete the deal to acquire Merrill. Lewis, for his part, states he didn't recall requesting such a letter.

The acquisition made Bank of America the number one underwriter of global high-yield debt, the third largest underwriter of global equity and the ninth largest adviser on global mergers and acquisitions.[62] As the credit crisis eased, losses at Merrill Lynch subsided, and the subsidiary generated 3.7 billion of Bank of America's 4.2 billion in profit by the end of Q1 2009, and over 25% in the Q3 2009.[63][64]

Bonus settlement

28

On August 3, 2009, Bank of America agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission (SEC) over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill. The bank approved the bonuses before the merger but did not disclose them to its shareholders when the shareholders were considering approving the Merrill acquisition, in December 2008. The issue was originally investigated by New York State Attorney General Andrew Cuomo, who commented after the suit and announced settlement that "the timing of the bonuses, as well as the disclosures relating to them, constituted a 'surprising fit of corporate irresponsibility'" and "our investigation of these and other matters pursuant to New York's Martin Act will continue." Congressman Kucinich commented at the same time that "This may not be the last fine that Bank of America pays for how it handled its merger of Merrill Lynch."[65] A federal judge, Jed Rakoff, in an unusual action, refused to approve the settlement on August 5.[66] A first hearing before the judge on August 10 was at times heated, and he was "sharply critic[al]" of the bonuses. David Rosenfeld represented the SEC, and Lewis J. Liman, son of Arthur L. Liman, represented the bank. The actual amount of bonuses paid was $3.6 billion, of which $850 million was "guaranteed" and the rest was shared amongst 39,000 workers who received average payments of $91,000; 696 people received more than $1 million in bonuses; at least one person received a more than $33 million bonus.[67] On September 14, the judge rejected the settlement and told the parties to prepare for trial to begin no later than February 1, 2010. "The judge focused much of his criticism on the fact that the fine in the case would be paid by the bank's shareholders, who were the ones that were supposed to have been injured by the lack of disclosure. 'It is quite something else for the very management that is accused of having lied to its shareholders to determine how much of those victims money should be used to make the case against the management go away,' the judge wrote. ... The proposed settlement, the judge continued, 'suggests a rather cynical relationship between the parties: the S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger; the bank's management gets to claim that they have been coerced into an onerous

29

settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth.'"[68]

While ultimately deferring to the SEC, in February, 2010, Judge Rakoff approved a revised settlement with a $150 million fine "reluctantly", calling the accord "half-baked justice at best" and "inadequate and misguided." Addressing one of the concerns he raised in September, the fine will be "distributed only to Bank of America shareholders harmed by the non-disclosures, or 'legacy shareholders,' [and it's also] an improvement on the prior $33 million while still 'paltry,' according to the judge." Case: SEC v. Bank of America Corp., 09-cv-06829, United States District Court for the Southern District of New York.[69]
Investigations also were held on this issue in the United States House Committee on Oversight and Government Reform[68], under chairman Edolphus Towns (D-NY)[70] and in its investigative Domestic Policy Subcommittee under Kucinich.

FEDERAL BAILOUT Bank of America received US $20 billion in the federal bailout from the US government through the Troubled Asset Relief Program (TARP) on 16 January 2009 and also got guarantee of US $118 billion in potential losses at the company.[72] This was in addition to the $25 billion given to them in the Fall of 2008 through TARP. The additional payment was part of a deal with the US government to preserve Bank of America's merger with the troubled investment firm Merrill Lynch.[73] Since then, members of the US Congress have expressed considerable concern about how this money has been spent, especially since some of the recipients have been accused of misusing the bailout money. [74] The Bank's CEO, Ken Lewis, was quoted as claiming "We are still lending, and we are lending far more because of the TARP program." Members of the US House of Representatives, however, were skeptical and quoted many anecdotes about loan

30

applicants (particularly small business owners) being denied loans and credit card holders facing stiffer terms on the debt in their card accounts. According to a March 15, 2009 article in The New York Times, Bank of America received an additional $5.2 billion in government bailout money, channeled through American International Group.[75] As a result of its federal bailout and management problems, The Wall Street Journal reported that the Bank of America was operating under a secret "memorandum of understanding" (MOU) from the US government that requires it to "overhaul its board and address perceived problems with risk and liquidity management." With the federal action, the institution has taken several steps, including arranging for six of its directors to resign and forming a Regulatory Impact Office. Bank of America faces several deadlines in July and August and if not met, could face harsher penalties by federal regulators. Bank of America did not respond to The Wall Street Journal story.[76]
On December 2, 2009, Bank of America announced it would repay the entire US $45 billion they received in TARP and exit the program, using $26.2 billion of excess liquidity along with $18.6 billion to be gained in "common equivalent securities" (Tier 1 capital). The bank announced it had completed the repayment on December 9. Bank of America Ken Lewis said during the announcement, "We appreciate the critical role that the U.S. government played last fall in helping to stabilize financial markets, and we are pleased to be able to fully repay the investment, with interest... As America's largest bank, we have a responsibility to make good on the taxpayers' investment, and our record shows that we have been able to fulfill that commitment while continuing to lend." [77][78]

BANK OF AMERICA DIVISIONS Bank of America generates 90% of its revenues in its domestic market and continues to buy businesses in the US. The core of Bank of America's strategy is to be the number one bank in its domestic market. It has achieved this through key acquisitions.[79]

CONSUMER

31

Global Consumer and Small Business Banking (GC&SBB) is the largest division in the company, and deals primarily with consumer banking and credit card issuance. The acquisition of FleetBoston and MBNA significantly expanded its size and range of services, resulting in about 51% of the company's total revenue in 2005. It competes directly with the retail banking divisions of Citigroup and JPMorgan Chase.

The GC&SBB organization includes over 6,100 retail branches and over 18,700 ATMs across the United States. Bank of America is a member of the Global ATM Alliance, a joint venture of several major international banks that allows customers of the banks to use their ATM card or check card at another bank within the Global ATM Alliance with no ATM access fees when traveling internationally. Other participating banks are Barclays (United Kingdom), BNP Paribas (France), China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank (Canada) and Westpac (Australia and New Zealand).[80] This feature is restricted to withdrawals using a debit card, though credit card withdrawals are still subject to cash advance fees and foreign currency conversion fees. Additionally, some foreign ATMs use Smart Card technology and may not accept non-Smart Cards. Bank of America offers banking and brokerage products as a result of the acquisition of Merrill Lynch. Savings programs such as "Add it Up"[81] and "Keep the Change" have been well received and are a reflection of the product development banks have taken during the 2008 recession.
Bank of America, N.A is a nationally chartered bank, regulated by the Office of the Comptroller of the Currency, Department of the Treasury.

CORPORATE Before Bank of America's acquisition of Merrill Lynch, the Global Corporate and Investment
Banking (GCIB) business operated as Banc of America Securities LLC. The bank's investment banking

32

activities operate under the Merrill Lynch subsidiary and provided mergers and acquisitions advisory, underwriting, capital markets, as well as sales & trading in fixed income and equities markets. Its strongest groups include Leveraged Finance, Syndicated Loans, and mortgage-backed securities. It also has one of the largest research teams on Wall Street. Banc of America Merrill Lynch is based in New York City.

INVESTEMENT MANAGEMENT Global Wealth and Investment Management manages assets of institutions and individuals. It is among the 10 largest U.S. wealth managers (ranked by private banking assets under management in accounts of $1 million or more as of June 30, 2005). In July 2006, Chairman Ken Lewis announced that GWIM's total assets under management exceeded $500
billion. GWIM has five primary lines of business: Premier Banking & Investments (including Bank of America Investment Services, Inc.), The Private Bank, Family Wealth Advisors, and Bank of America Specialist. Bank of America has recently spent $675 million building its US investment banking business and is looking to become one of the top five investment banks worldwide. "Bank of America already has excellent relationships with the corporate and financial institutions world. Its clients include 98% of the Fortune 500 companies in the US and 79% of the Global Fortune 500. These relationships, as well as a balance sheet that most banks would kill for, are the foundations for a lofty ambition."[82] Bank of America has a massive new headquarters for its New York City operations. The skyscaper is located on 42nd Street and Avenue of the Americas, at Bryant Park, and features state of the art, environmentally-friendly technology throughout its 2.1 million square feet (195,096 m) of office space. The building is the headquarters for the company's investment banking division, and also hosts most of Bank of America's New York-based staff.

INTERNATIONAL OPERATIONS In 2005, Bank of America acquired a 9% stake in China Construction Bank, China's second largest bank, for $3 billion.[83] It represented the company's largest foray into China's growing banking sector. Bank of America currently has offices in Hong Kong, Shanghai, and Guangzhou and is looking to greatly expand its Chinese business as a result of this deal. In 2008 Bank of America was awarded Deal of the Year - Project Finance Deal of the Year at the 2008 ALB Hong Kong Law Awards.[84] Currently, Bank of America maintains branches in Mumbai, Chennai, Calcutta, New Delhi, and Bangalore. For the fiscal year ending March 31, 2006, Bank of America reported an 80% increase in net profit.[85]

33

Bank of America operated under the name BankBoston in many other Latin American countries, including Brazil. In 2006, Bank of America sold all BankBoston's operations to Brazilian bank Banco Ita, in exchange for Ita shares. The BankBoston name and trademarks were not part of the transaction and, as part of the sale agreement, cannot be used by Bank of America. (That meant the extinction of the BankBoston brand). Bank of America's Global Corporate and Investment Banking spans the Globe with divisions in United States, Europe, and Asia. The U.S. headquarters are located in New York, European headquarters are based in London, and Asia's headquarters are split between Singapore & Hong Kong.

34

OWNERSHIP PATTERN

Individuals Kenneth D Lewis John A Thain Bruce L Hammonds Keith T Banks Charles K Gifford Institutions Barclays Global Investors State Street Corp FMR Vanguard Group Capital World Investors Wellington Management Comp AXA Bank of New York Mellon Corp Morgan Stanley JP Morgan Chase & Co

Shares held 2,372,260 679,946 504,429 336,371 334,176 Shares held 192,077,414 187,394,299 152,596,052 142,204,635 114,829,550 102,053,133 89,824,923 65,284,687 58,081,288 54,816,605 % held 3.83 3.73 3.04 2.83 2.29 2.03 1.79 1.30 1.16 1.09

35

ORGANISATIONAL STRUCTURE

ORGANISATION STRUCTURE

We believe that the structure of an organization needs to be dynamic, constantly evolving and responsive to changes both in the external and internal environments. Our organizational structure is designed to support our business goals, and is flexible while at the same time ensuring effective control and supervision and consistency in standards across business groups. The organization structure is divided into five principal groups Retail Banking,Wholesale Banking, Project Finance & Special Assets Management, International Business and Corporate

36

Centre.The BANK OF AMERICA retail assets business including various retail credit products, retail liabilities .BANK OF AMERICA corporate banking business including credit products and banking services, with separate dedicated groups for large corporates,Government and public sector entities and emerging corporates. Treasury, structured finance and credit portfolio management also form part of this group.

BOARD OF DIRECTOR

37

Brian T. Moynihan Chief Executive Officer, Bank of America Corporation

Catherine P. Bessant Global Technology and Operations Executive, Bank of America Corporation

David C. Darnell Co-Chief Operating Officer, Bank of America Corporation

Anne M. Finucane Global Strategy and Marketing Officer, Bank of America Corporation

38

Charles O. Holliday, Jr. Chairman, Board of Directors, Bank of America Corporation

Christine P. Katziff Corporate General Auditor, Bank of America Corporation

Terry P. Laughlin Chief Risk Officer, Bank of America Corporation

Gary G. Lynch Global Chief of Legal, Compliance, and Regulatory Relations, Bank of America Corporation

39

Thomas K. Montag Co-Chief Operating Officer, Bank of America Corporation

Charles H. Noski Vice Chairman, Bank of America Corporation

Andrea B. Smith Global Head of Human Resources, Bank of America Corporation

Ron D. Sturzenegger Legacy Asset Servicing Executive, Bank of America Corporation

40

Bruce R. Thompson Chief Financial Officer, Bank of America Corporation

PRODUCTION LAYOUT

Bank of America Tower in Phoenix, Arizona Bank of America Center in Los Angeles

555 California Street, formerly the Bank of America Center and world headquarters, in San Francisco

Bank of America Plaza in Fort Lauderdale, Florida

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Bank of America Tower in Jacksonville, Florida Bank of America Tower in Miami, Florida Bank of America Center in Orlando, Florida Bank of America Tower in St. Petersburg, Florida Bank of America Plaza in Tampa, Florida

Bank of America Plaza in Atlanta, Georgia (the tallest U.S. building outside of NYC and Chicago)

Bank of America Building, formerly the LaSalle Bank Building in Chicago,

Illinois One City Center, often called the Bank of America building due to signage rights, in Portland, Maine

Bank of America Building in Baltimore, Maryland Bank of America Plaza in St Louis, Missouri Bank of America Tower in Albuquerque, New Mexico Bank of America Tower in New York City

Bank of America Corporate Center in Charlotte, North Carolina (The corporate headquarters)

Bank of America Plaza in Charlotte, North Carolina Bank of America Building in Providence, Rhode Island Bank of America Plaza in Dallas, Texas Bank of America Center in Houston, Texas Bank of America Tower in Midland, Texas Bank of America Plaza in San Antonio, Texas Bank of America Fifth Avenue Plaza in Seattle, Washington Columbia Center in Seattle, Washington Bank of America Tower in Hong Kong

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ORGANISATIONAL POLICIES

BANK OF AMERICA CORPORATION Corporate Governance Guidelines As of February 24, 2011 The Board of Directors (the Board) of Bank of America Corporation (the Company), acting on the recommendation of its Corporate Governance Committee, has formally adopted these guidelines to promote a high level of performance from the Board and management, to promote the interests of stockholders and to further the Companys commitment to best practices in corporate governance. 1. Board Composition Number of Directors . The Bylaws provide that the number of directors shall be fixed from time to time by the Board, and the Board believes that a range of five to 18 directors is appropriate. The Corporate Governance Committee will periodically review the size of the Board and balance necessary experience, expertise and independence with a membership that is not too large to function efficiently. Director Independence. A majority of the Board shall consist of directors who are independent under the Director Independence Categorical Standards (Categorical Standards) as adopted by the Board (attached to these guidelines as Annex A) and the criteria for independence contained in the New York Stock Exchange (NYSE) listing standards. The Board uses these Categorical Standards to assist with its determination of each directors independence status. 2. Board Leadership Chairman of the Board. The Board may elect from among its members a Chairman who will organize Board activities to enable the Board to effectively provide guidance to

43

and oversight of management. The Chairman is responsible for, among other things: creating and maintaining an effective working relationship with the members of management and the Board; providing management with ongoing direction as to Board needs, interests and opinions; and assuring that the Board agenda is appropriately directed to the matters of greatest importance to the Company. 3. Director Qualifications and Selection Director Assessment and Nomination. The Corporate Governance Committee, in consultation with the Chairman, will identify and evaluate individual candidates for their qualifications to become directors. The Committee will recommend qualified candidates to the Board as the need arises to fill vacancies or to stand for election at the annual meeting of stockholders, unless the Company has contractually granted the right to nominate directors to third parties. Standards for Evaluating Candidates as Director-Nominees. To discharge their duties in identifying and evaluating individual nominees for directors, the Corporate Governance Committee and the Board shall consider the overall experience and expertise represented by the Board as well as the qualifications of each candidate. In the evaluation process, the Corporate Governance Committee and the Board shall take the following into account:

At least a majority of the Board must be comprised of independent directors. Candidates should be capable of working in a collegial manner with persons of

different educational, business and cultural backgrounds and should possess skills and expertise that complement the attributes of the existing directors.

Candidates should represent a diversity of viewpoints, backgrounds, experiences

and other demographics.

Candidates should demonstrate notable or significant achievement and possess

senior-level business, management or regulatory experience that would benefit the Company.

44

Candidates shall be individuals of the highest character and integrity. Candidates shall be free from any conflict of interest that would interfere with

their ability to properly discharge their duties as a director or would violate any applicable law or regulation.

Candidates shall be capable of devoting the necessary time to discharge their

duties, taking into account memberships on other Boards and other responsibilities.

Candidates shall have the desire to represent the interests of all stockholders.

Submission of Director-Nominee Candidates to the Corporate Governance Committee. The Corporate Governance Committee will, in consultation with the Chairman, consider candidates proposed by directors, management, search firms retained by the committee, and stockholders. A stockholder (or a group of stockholders) who wishes to nominate a candidate for consideration by the Corporate Governance Committee and the Chairman during a specific calendar year must have submitted the nomination in writing prior to October 15 of the preceding year. The proposal must contain the following information and meet any other criteria as set forth in the Bylaws:

the name and address of the stockholder; a representation that the stockholder is a holder of the Company's voting stock

(including the number and class of shares held);

a disclosure of any hedging or other arrangement with respect to any share of the

Companys stock (including any short position on or any borrowing or lending of shares of stock) made by or on behalf of the stockholder (a) to mitigate loss to or manage risk of stock price changes for the stockholder, or (b) to increase or decrease the voting power of the stockholder;

a description of all arrangements or understandings among the stockholder and

the candidate and any other person or persons (naming such person or persons) pursuant to which the proposal is made by the stockholder;
45

a statement signed by the candidate confirming that the candidate will serve if

elected by the stockholders and will comply with the Companys Code of Ethics, Insider Trading Policy, Corporate Governance Guidelines and any other applicable rule, regulation, policy or standard of conduct applicable to the directors; and

a description of the candidates background and experience and the reasons why

he or she meets the criteria set forth above under Standards for Evaluating Candidates as Director-Nominees. Majority Voting for Directors. In an uncontested election, a director who fails to receive the required number of votes for re-election in accordance with the Bylaws shall offer to resign. In addition, a director whose resignation is under consideration shall abstain from participating in any recommendation or decision regarding that resignation. The Corporate Governance Committee shall make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Corporate Governance Committee and the Board, in making their decisions, may consider any factor or other information that they deem relevant. The Board shall act on the tendered resignation, taking into account the Corporate Governance Committees recommendation, and shall publicly disclose its decision regarding the resignation within ninety (90) days after the results of the election are certified. If the resignation is not accepted, the director will continue to serve until the next annual meeting of stockholders and until the directors successor is elected and qualified. The Board shall nominate for election or re-election as directors only candidates who agree to tender, following the annual meeting of stockholders at which they are elected or re-elected as directors, irrevocable resignations that will be effective upon (a) the failure to receive the required vote at the next annual meeting at which they are nominated for re-election, and (b) Board acceptance of such resignation. In addition, the Board shall fill director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of resignation tendered by other directors in accordance with this Guideline. 4. Continuation as a Director
46

Director Tenure. The Board does not believe it appropriate to established term limits for its members because such limits may deprive the Company and the Board of the contribution of directors who have been able to develop, over time, valuable experience and insights into the Company. Age Limit and Change of Principal Occupation. An individual who has reached the age of 72 shall not be nominated for initial election to the Board. However, the Corporate Governance Committee may recommend and the Board may approve the nomination for re-election of a director at or after the age of 72, if, in light of all the circumstances, it is in the best interests of the Company and its stockholders. A director who changes his or her principal occupation shall offer to resign. The Corporate Governance Committee, in conjunction with the Chairman, will determine whether to accept such resignation. Management directors shall resign from the Board when they leave their officer positions. Limits on Board and Audit Committee Memberships. To ensure that directors have sufficient time to properly discharge their duties, directors are expected to seek Corporate Governance Committee approval prior to joining the board of any other public company. No director shall serve on the boards more than six public companies, including the Companys Board. If a member of the Audit Committee wishes to serve on the audit committees of more than a total of three public companies, including the Companys Audit Committee, the director must seek Board approval prior to accepting the additional service. 5. Committee Matters Board Committees. The Board has the authority to discharge its responsibilities through committees and subcommittees under its supervision. Standing committees of the Board are: Audit Committee; Credit Committee; Compensation and Benefits Committee; Corporate Governance Committee; and Enterprise Risk Committee, as well as a boardlevel Executive Committee. The Board has allocated a majority of its risk oversight responsibilities to the Audit, Credit and Enterprise Risk Committees. The Board may

47

establish additional committees or eliminate existing committees as it deems appropriate, consistent with the Companys Bylaws, and applicable laws or regulations. Each committee of the Board shall have the authority and responsibilities set forth in the Companys Bylaws, the resolutions creating them and any applicable charter. Assignment and Rotation of Committee Membership. The Board, upon recommendation of the Corporate Governance Committee, shall appoint committee members. Consistent with the criteria set forth in their charters and/or as required by the NYSE and applicable laws or regulations, all members of the Audit, Compensation and Benefits, and Corporate Governance Committees shall be independent directors and all members of the Credit and Enterprise Risk Committees shall be non-management directors. A director may serve on more than one committee. Board committee assignments and Board committee chair positions are reviewed each year by the Corporate Governance Committee and approved by the Board. The Board does not have a strict committee rotation policy, but may, upon recommendation of the Corporate Governance Committee, change committee assignments and chair positions periodically, with a view towards balancing director experience and interest, committee continuity and needs, and evolving legal and regulatory considerations. 6. Board Operations Meeting Attendance. All directors are expected to attend the annual meeting of stockholders, Board meetings and meetings of the Board committees on which they serve. They are expected to prepare for each meeting in advance and to dedicate sufficient time at each meeting as necessary to properly discharge their responsibilities to the Company and its stockholders. Informational materials useful in preparing for meetings will be distributed to the Board in advance of each meeting. Executive Sessions of Non-Management Directors. The non-management directors will meet in executive session at each regularly scheduled Board meeting. The independent directors will meet in an executive session at least annually if there are nonmanagement directors who are not independent.

48

Director Access to Officers, Associates and Independent Advisors. Directors have complete and open access to officers and associates of the Company. Any meeting or contact a director wishes to initiate may be arranged through the Chairman or the Corporate Secretary or directly by the director. The Board and its committees may retain independent advisors at the Companys expense. Director Orientation and Continuing Education. All new directors must participate in the Companys orientation program for new directors within six months of their election or appointment. This orientation will include presentations by senior management to familiarize new directors with the Companys strategic plans, its significant financial, accounting and risk management issues, compliance programs, conflict policies, Code of Ethics, Insider Trading Policy and other policies. The Board encourages directors to participate in continuing education programs and reimburses directors for the expense of such participation. Confidentiality. In order to facilitate open discussion, the proceedings and deliberations of the Board and its committees shall be confidential. Each director shall maintain the confidentiality of information received in connection with his or her service as a director. Speaking on Behalf of the Company. It is important for the Company to speak to associates and outside constituencies with a unified voice. As a general matter, the Board believes that senior management should serve as the primary spokesperson for the Company. If comments from directors are appropriate or necessary, they should, in most circumstances, come from the Chairman of the Board, and be made at the request of the Board or senior management. 7. Board Responsibilities Oversight. The basic responsibility of the Board is to oversee the Companys businesses and affairs, and to exercise reasonable business judgment on behalf of the Company. In discharging this obligation, the Board relies on the honesty, integrity, business acumen

49

and experience of the Companys management, its outside advisors and the Companys independent registered public accounting firm. Annual Performance Evaluation. To determine whether the Board and its committees are functioning effectively, the Board, acting through the Corporate Governance Committee, and the Board committees, each as provided for in their respective charters, shall conduct annual self-evaluations. The Corporate Governance Committee shall lead the evaluations and will report the results of the evaluations to the Board. Chief Executive Officer Performance Evaluation. The Compensation and Benefits Committee shall conduct an annual review of the Chief Executive Officers performance, and report the results of its evaluation to the Board. Management Succession Planning. The Board, in coordination with the Corporate Governance Committee, shall assure that the Company has in place appropriate planning to address emergency CEO succession planning in the event of extraordinary circumstances, CEO continuity succession planning, and succession planning for key executives to ensure continuity in senior management. The CEO, in coordination with the Global Human Resources Officer, shall periodically make recommendations and evaluations of potential successors, including a review of any development plans recommended for such individuals, to the Corporate Governance Committee. The Companys succession plan for key executives shall include the identification of potential candidates, developed in partnership with the CEO and executive management. The Board shall review succession planning at least annually. Director Compensation. The Compensation and Benefits Committee shall periodically review and make recommendations to the Board as to the form and amount of director compensation. Director compensation should provide reasonable compensation for nonmanagement directors commensurate with their duties and responsibilities as directors, and provide a sufficient level of compensation necessary to attract and retain the highest quality individuals. A portion of compensation should be in the form of company

50

common stock in order to further align the interests of non-management directors with those of the stockholders. Strategic Planning. The Board shall ensure that management develops strategic plans for the Companys business and periodically reviews these plans with the Board. Ethical Business Environment. The Board shall ensure that the Company, through its management, maintains high ethical standards and effective policies and practices designed to protect the Companys reputation, assets and businesses. The Company has adopted a Code of Ethics that establishes the Companys core values and addresses potential conflicts of interest, confidentiality and information security, protection and proper use of corporate assets, personal financial responsibility, compliance with law and transactions in the securities of the Company. All directors annually certify to their review of the Code of Ethics and are expected to follow the Code of Ethics to the extent applicable to them. Charitable Giving and Political Contributions. The Board shall annually review the Companys report on its charitable giving and political contribution programs. Other Matters Minimum Stock Ownership by Executive Officers and Directors. In order to align the interests of the Companys executive officers and directors with those of the Companys stockholders, the Board has adopted the following minimum stock ownership requirements: (a) the Chief Executive Officer shall hold at least 500,000 shares of the Companys common stock and retain at least 50% of the net after-tax shares from future equity awards until retirement; (b) other executive officers shall hold at least 300,000 shares of the Companys common stock and retain at least 50% of the net after-tax shares from future equity awards until the ownership guideline is achieved; and (c) nonmanagement directors are required to hold and cannot sell the restricted stock they receive as compensation (except as necessary to pay taxes upon vesting) until termination of their service.

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All full value shares and units beneficially owned by executive officers and directors are included in the calculation; performance contingent shares and units are included in the calculation when earned; and stock options are not included. Newly appointed executive officers will have up to five years to achieve compliance. Incentive Compensation Recoupment Policy. If the Board or an appropriate Board committee has determined that any fraud or intentional misconduct by one or more executive officers caused, directly or indirectly, the Company to restate its financial statements, the Board or committee shall take, in its sole discretion, such action as it deems necessary to remedy the misconduct and prevent its recurrence. The Board or committee may require reimbursement of any bonus or incentive compensation awarded to such officers and/or effect the cancellation of unvested restricted stock or outstanding stock option awards previously granted to such officers in the amount by which such compensation exceeded any lower payment that would have been made based on the restated financial results. Related Person Transactions. The Corporate Governance Committee shall review and approve or ratify any transaction or series of transactions where the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, the Company is a participant and a related person (as defined below) has or will have a direct or indirect material interest. Any committee member who is a related person with respect to a transaction under review may not participate in the deliberations or vote respecting such approval; provided, however, that such director may be counted in determining the presence of a quorum at a meeting of the committee which considers the transaction. On a semi-annual basis, each of the Companys directors and executive officers and each holder of 5% or more of the Companys outstanding common stock shall complete a questionnaire that, among other things, requests information regarding related persons and their transactions or relationships with the Company. Upon receipt of the questionnaire responses, the Legal and the Compliance departments shall conduct a review to determine if there are any transactions subject to these guidelines that have not previously been approved or ratified by the Corporate Governance Committee. Any such

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transactions shall be submitted for consideration by the Corporate Governance Committee. When considering a request for approval or ratification of a transaction, the Corporate Governance Committee may consider, among other things: (a) the nature of the related persons interest in the transaction; (b) whether the transaction involves arms-length bids or market prices and terms; (c) the materiality of the transaction to each party; (d) the availability of the product or service through other sources; (e) whether the Companys Code of Ethics could be implicated or the Companys reputation put at risk; (f) whether the transaction would impair the judgment of a director or executive officer to act in the best interest of the Company; (g) the acceptability of the transaction to the Companys regulators; and (h) in the case of a non-employee director, whether the transaction would impair his or her independence or status as an outside or non-employee director. For purposes of this guideline, (a) related person means any director, nominee for election as a director or executive officer of the Company, any person owning 5% or more of any series of the Companys voting securities, or any of their immediate family members, and (b) immediate family member means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, or any person (other than a tenant or employee) sharing the household. The Board has determined that each of the following types of transactions does not create or involve a direct or indirect material interest on the part of the related person and therefore do not require review or approval under these guidelines: (i) Any financial services, including brokerage services, banking services, loans, insurance services and other financial services provided by the Company to any related person, provided that the services are (a) provided in the ordinary course of business, (b) on substantially the same terms as those prevailing at the time for comparable services provided to non-affiliates, and (c) in compliance with applicable law, including the

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Sarbanes-Oxley Act of 2002 and Regulation O of the Board of Governors of the Federal Reserve Board. (ii) Transactions involving the purchase or sale of products or services not described in clause (i) above in which the related persons interest derives solely from his or her service as an executive officer or employee of another corporation or organization that is a party to the transaction, provided that payments from or to the Company for such products or services in any fiscal year do not exceed the greater of $1 million or 2% of the other entitys consolidated gross revenues for the most recently ended fiscal year for which total revenue information is available. (iii) Transactions in which the related persons interest derives solely from his or her service as a director of, or his or her ownership of less than 10% of the equity interest (other than a general partnership interest) in, another corporation or organization that is a party to the transaction. (iv) Transactions in which the related persons interest derives solely from his or her ownership of a class of equity securities of the Company and all holders of that class of equity securities received the same benefit on a pro rata basis. (v) Transactions in which the related persons interest derives solely from his or her service as a director, trustee or officer (or similar position) of a not-for-profit organization, foundation or university that receives donations from the Company (excluding for this purpose matching funds paid by the Company or the Bank of America Foundation as a result of donations by the Companys directors or associates), provided that such donations in any fiscal year do not exceed the greater of $1 million or 5% of the other entitys consolidated gross revenues for the most recently ended fiscal year for which total revenue information is available. (vi) Transactions where the rates or charges involved are determined by competitive bids, or involve the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority.

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(vii) Employment and compensation arrangements for any executive officer and compensation arrangements for any director, provided that such arrangements have been approved by the Compensation and Benefits Committee or the Board.

9. Communications with the Board Stockholders and other parties may communicate directly with the Board, its Chairman, any other director, non-management members of the Board as a group or any committee of the Board by sending a letter indicating the intended addressee, to: c/o Corporate Secretary Bank of America Corporation Hearst Tower 214 North Tryon Street NC1-027-20-05 Charlotte, NC 28202 The Corporate Secretary or the secretary of the designated Board committee may sort or summarize the communications as appropriate. Communications that are commercial solicitations, customer complaints, incoherent or obscene will not be forwarded to the Board, its Chairman, or any director or committee of the Board.

ANNEX A BANK OF AMERICA CORPORATION DIRECTOR INDEPENDENCE CATEGORICAL STANDARDS

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No director of Bank of America Corporation (the Corporation) qualifies as independent unless this board of directors affirmatively determines that such director has no material relationship with the Corporation. The commentary to Section 303A.02 of the New York Stock Exchange Listed Company Manual (the NYSE Manual) provides that a board may adopt and disclose categorical standards to assist it in making determinations of independence. Independence determinations will be made on an annual basis at the time the board approves director nominees for inclusion in the proxy statement and, if a director is considered for appointment to the board between annual meetings, prior to such appointment. Each director shall notify the board of any change in circumstances that may put his or her independence at issue. If so notified, the board will reevaluate, as promptly as practicable thereafter, such directors independence. In order to assist the board in making determinations of independence, any relationship described below shall be presumed material if it existed within the preceding three years: (a) the director was an employee of the Corporation or an immediate family member of the director was an executive officer of the Corporation; (b) the director, or an executive officer of the Corporation who is an immediate family member of the director, received more than $120,000 within any 12 month period in direct compensation from the Corporation, other than director and committee fees and pension or other deferred compensation for prior service (provided that such compensation was not contingent in any way on continued service); (c) (i) the director or an immediate family member is a current partner of a firm that is the Corporations internal or external auditor; (ii) the director is a current employee of such a firm; (iii) the director has an immediate family member who is a current employee of such a firm and who personally works on the Corporations audit; or (iv) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Corporations audit during that time; (d) the director was an executive officer of a company in which an executive officer of the Corporation served on the compensation committee of the board of directors (or had an immediate family member who was an executive officer of such company); (e) the director was an employee or executive officer, or an immediate family member of

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the director was an executive officer, of another company that made payments to or received payments from the Corporation for property or services in an amount which, in any single fiscal year, exceeded the greater of $1 million or 2% of such other company's consolidated gross revenues for the most recently ended fiscal year for which total revenue information is available; or (f) the director, or an immediate family member of the director who resides in the same home as the director, was employed as an executive officer of a non-profit organization, foundation or university to which the Corporation made discretionary contributions (excluding for this purpose matching funds paid by the Corporation or the Bank of America Foundation as a result of contributions by the Corporations directors or employees) that, in any fiscal year exceeded the greater of $1 million or 5% of the entitys consolidated gross revenues for the most recently ended fiscal year for which total revenue information is available. For purposes of the above-described categorical standards, the term immediate family member includes a persons spouse, parents, children, siblings, mothers- and fathers-inlaw, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than domestic employees) who shares such persons home; provided, that any such persons who no longer have any such relationship as a result of legal separation or divorce, or death or incapacitation, shall not be considered immediate family members. Further, the foregoing categorical standards shall be deemed to be automatically updated to reflect any changes made to the NYSE listing standards and interpreted in the same manner as such rules. The board specifically believes that a relationship between the Corporation and an entity where a director is solely a non-management director is not material. In addition, any other relationship not described in (a) through (f) above will be presumed not to be material to the directors independence unless: (i) the relationship was not entered into on terms substantially similar to those that would be offered to non-affiliated persons or entities in comparable circumstances; (ii) with respect to any extension of credit by the Corporation or one of its subsidiaries, such extension of credit was not made in

57

compliance with applicable law, including Regulation O of the Board of Governors of the Federal Reserve System and Section 13(k) of the Securities Exchange Act of 1934; or (iii) in exercising its judgment in light of all the applicable facts and circumstances, the board determines that the relationship should be considered material.

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INDUSTRY OVERVIEW

INDUSTRY OVERVIEW

THE BANKING INDUSTRY

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If there is one industry that has the stigma of being old and boring, it would have to be banking; however, a global trend of deregulation has opened up many new businesses to the banks. Coupling that with technological developments like internet banking and ATMs, the banking industry is obviously trying its hardest to shed its lackluster image. There is no question that bank stocks are among the hardest to analyze. Many banks hold billions of dollars in assets and have several subsidiaries in different industries. A perfect example of what makes analyzing a bank stock so difficult is the length of their financials - they are typically well over 100 pages. While it would take an entire textbook to explain all the ins and outs of the banking industry, here we'll shed some light on the more important areas to look at when analyzing a bank as an investment. There are two major types of banks in North America: Regional (and Thrift) Banks - These are the smaller financial institutions, which primarily focus on one geographical area within a country. In the U.S., there are six regions: Southeast, Northeast, Central, etc. Providing depository and lending services is the primary line of business for regional banks. Major (Mega) Banks - While these banks might maintain local branches, their main scope is in financial centers like New York, where they get involved with international transactions and underwriting.
Could you imagine a world without banks? At first, this might sound like a great thought! But banks (and financial institutions) have become cornerstones of our economy for several reasons. They transfer risk, provide liquidity, facilitate both major and minor transactions and provide financial information for both individuals and businesses .

Running a bank is just as difficult as analyzing it for investment purposes. A bank's management must look at the following criteria before it decides how many loans to extend, to whom the loans can be given, what rates to set, and so on : Capital Adequacy and the Role of Capital Asset and Liability Management - There is a happy medium between banks overextending themselves (lending too much) and lending enough to make a profit. Interest Rate Risk - This indicates how changes in interest rates affect profitability. Liquidity - This is formulated as the proportion of outstanding loans to total assets. If more than 60-70% of total assets are loaned out, the bank is considered to be highly illiquid. Asset Quality - What is the likelihood of default? Profitability - This is earnings and revenue growth.

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Perhaps the biggest distinction that sets the banking industry apart from others is the government's heavy involvement in it. Besides setting restrictions on borrowing limits and the amount of deposits that a bank must hold in the vault, the government (mainly the Federal Reserve) has a huge influence on a bank's profitability

Key Ratios/Terms Interest Rates: In the U.S., the Federal Reserve decides the interest rates. Because interest rates directly affect the credit market (loans), banks constantly try to predict the next interest rate moves, so they can adjust their own rates. A bad prediction on the movement of interest rates can cost millions. (To learn more, read Trying To Predict Interest Rates.) Gap: This refers to the difference, over time, between the assets and liabilities of a financial institution. A "negative gap" occurs when liabilities are higher than assets. Conversely, when there are more assets than liabilities, there is a positive gap. When interest rates are going up, banks with a positive gap will profit. The opposite is true when interest rates are falling. Capital Adequacy: A bank's capital, or equity, is the margin by which creditors are covered if the bank has to liquidate assets. A good measure of a bank's health is its capital/asset ratio, which, by law, is required to be above a prescribed minimum. The following are the current minimum capital adequacy ratios:

Tier 1 capital to total risk weighted credit (see below) must not be less than 4%. Total capital (Tier 1 plus Tier 2 less certain deductions) to total risk weighted credit exposures must not be less than 8%. (For more on this, read How Do Banks Determine Risk?)

The risk weighting is prescribed by the Bank for International Settlements. For example, cash and government securities are said to have zero risk, whereas mortgages have a risk weight of 0.5. Multiplying the assets by their risk weights gives the total risk-weighted assets, which is then used to determine the capital adequacy. Tier 1 Capital: In relation to the capital adequacy ratio, Tier 1 capital can absorb losses without a bank being required to cease trading. This is core capital, and includes equity capital and disclosed reserves. Tier 2 Capital: In relation to the capital adequacy ratio, Tier 2 capital can absorb losses in the event of a winding up, so it provides less protection to depositors. It includes items such as undisclosed reserves, general loss reserves and subordinated term debt. Gross Yield on Earning Assets (GYEA) = Total Interest Income
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Total Earning Assets This tells you what yields were generated from invested capital (assets). Rates Paid on Funds (RPF) = Total Interest Expense Total Earning Assets This tells you the average interest rate that the bank is paying on borrowed funds. Net Interest Margin (NIM) = (Total Interest Income - Total Interest Expense)
Total Earning Assets This tells you the average interest margin that the bank is receiving by borrowing and lending funds NATURE OF INDUSTRY Banks safeguard money and provide loans, credit, and payment services such as checking accounts, debit cards, and cashier's checks. Banks also may offer investment and insurance products. As a variety of models for cooperation and integration among finance industries have emerged, some of the traditional distinctions between banks, insurance companies, and securities firms have diminished. In spite of these changes, banks continue to maintain and perform their primary roleaccepting deposits and lending money.

Goods and services. Banking comprises two parts: Monetary AuthoritiesCentral Bank, and Depository Credit Intermediation. The U.S. Federal Reserve System is the central bank of the United States and manages the Nation's money supply and international reserves, holds reserve deposits of other domestic banks and the central banks of other countries, and issues the dollars we use. The credit intermediation and related services industry provides banking services to consumers and businesses. It secures the money of depositors, provides checking and debit card services, and lends money to consumers and businesses through credit cards, mortgages, car loans, investment loans, and lines of credit. Industry organization. There are three basic types of banks: commercial banks, savings and loan associations, and credit unions. Although some of the differences between these types of banks have lessened, there are key distinctions. Commercial banks, which dominate this industry, offer a full range of services for individuals, businesses, and

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governments. Commercial banks come in a wide range of sizes, from large global banks to mid-size regional and small community banks. In addition to typical banking services, global banks lend internationally and trade foreign currencies. Regional banks have numerous branches and automated teller machine (ATM) locations throughout a multistate area and provide banking services to individuals and local businesses. Community banks are based locally and have fewer

branches than regional or global banks. In recent years, online bankswhich provide financial services entirely over the Internethave entered the market, with some success. However, even in Internet banking distinctions have lessened as traditional banks also offer online banking, and some formerly Internet-only banks have opened branches. Savings banks and savings and loan associations, sometimes called thrift institutions, are the second largest group of depository institutions. They were first established as community-based institutions to finance mortgages for people to buy homes and still cater mostly to the savings and lending needs of consumers. Over time, distinctions between savings banks and commercial banks have largely disappeared. Credit unions are another kind of depository institution. Credit unions are formed by people with a common bond, such as those who work for the same company, belong to the same labor union, or live in the same county. Only people who have the common bond are allowed to become members. Loans and savings accounts are restricted to members. Credit unions are nonprofit organizations that are governed by a board elected by the depositors (members). Federal Reserve banks are Federal Government agencies that perform many financial services. Their chief responsibilities are to regulate the banking industry and to create and implement the Nation's monetary policy by controlling the money supplythe total quantity of dollars in the country, including cash and bank deposits. The Federal Reserve uses monetary policy to promote economic growth while limiting inflation. During
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periods of slower economic activity, the Federal Reserve may increase the money supply by purchasing government securities and other assets. The Federal Reserve also promotes economic growth by lowering the interest rate it charges banks for loans. Increasing the money supply and lowering the interest rate charged to banks that borrow money gives banks more money to lend and, hopefully, grows the economy. The Federal Reserve may attempt to fight inflation by selling its government securities or raising the interest rate it charges banks, thus reducing the amount of money banks can lend. Federal Reserve banks also perform a variety of services for other banks, including processing checks that are drawn and paid out by different banks. Interest on loans is the principal source of revenue for most banks, making their various lending departments critical to their success. The commercial lending department loans money to companies; the

consumer lending department handles student loans, credit cards, personal loans, and car loans; and the mortgage lending department loans money to individuals and businesses to purchase real estate. The money banks lend comes primarily from consumer and business deposits in checking, money market, and savings accounts and certificates of deposit. These deposits often earn interest for their owners, and provide owners with payment methods, such as online bill payments, checks, and wire transfers. Deposits in many banks are insured and regulated by a US Government agency, the Federal Deposit Insurance Corporation (FDIC), which guarantees that depositors will get their money back, up to a stated limit, if a bank should fail. Deposits in savings and loan associations and credit unions are insured and regulated by other US government agencies. Recent developments. Declining home prices were one cause of the recent financial crisis. As home values declined, many borrowers stopped paying (defaulted) on their home loans (mortgages.) With prices of houses declining and increasing rates of default,
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banks suffered large losses. Some banks suffered larger losses than other banks because they made riskier mortgage loans or owned mortgages concentrated in areas of the country with the largest housing price declines. Many banks with large losses were bought by other, stronger banks, or were taken over by the FDIC. The financial crisis accelerated an ongoing fundamental change in the banking industry as banks diversify their services to become more competitive. The financial crisis has allowed stronger banks to buy other banks and companies that provide other financial services at lower prices than before the crisis. Some other financial services that many banks offer their customers include: financial planning and asset management services, brokerage services, and insurance services. Banks purchase companies that offer these services and still offer them through a subsidiary or a third party. The financial crisis also helped commercial banks increase their share of the investment banking industry. Investment banks help companies and governments raise money through the issuance of stocks and bonds. As banks respond to regulatory changes and other changes driven by the financial crisis, the nature of the banking industry will continue to undergo significant change. Growth Potential There are a range of retail jobs to suit most skill sets, including banking officer, probationary officer, loan agent, assessor, mortgage loan underwriter, loan processing officer, accountant, product marketing and sales executive, and customer service executive among others. However, job security is not very high in retail banking as many players suffer from shrinking margins and poor customer retention due to increasing competition and limited market differentiation, leading to lay-

offs. Meanwhile, there are also more skilled jobs available such as actuarist, equity researcher, forex trader, securities linked products developer and portfolio manager for those with the relevant knowledge and ambition. The biggest opportunity in this sector remains in improving information flow to customers. Hence, there is a growing emphasis on in-house research and market intelligence. PERFORMANCE The financial crisis of 2007-2008 was triggered by an insolvent United States banking system (catalysts of which were sub-prime lending, over leveraging and poor regulation)

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resulting in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world. The destabilization of the banking sector in the U.S. had a domino effect on the global financial industry, with effects felt in Europe, the Middle East and the Asia Pacific. 24 months later, the global financial industry still hasnt regained its lost glory, and even countries with deep pockets such as the U.A.E. and Singapore have exhibited limited sectoral growth. The Indian financial industry underwent rapid transformation post liberalization in the early 90s, resulting in greater inflow of investments from FII's into the capital market. Despite the foray of foreign banks in the country, nationalized banks continue to be the biggest lenders in the country, primarily due to their size and penetration of networks. In fact, Industry estimates indicate that over 80% of commercial banks in India are in the public sector and of the 50-odd private banks, less than half are foreign banks. The Reserve Bank of India is the Indian equivalent of the Fed. The opportunities in this industry remain extremely promising due to its relatively low penetration of both basic as well as advanced financial products. Though the Indian finance and banking industry did suffer significantly during the past 2 years, it was relatively sheltered from the triggers of the global melt-down, suffering instead due to monies from FIIs drying up, falling interest rates, rapidly rising inflation and poor investor confidence. Annual reports suggest that most of the larger Banks have begun to pick up from where they left off, albeit with more caution, and most industry pundits are optimistic about the current fiscal year. WORKING CONDITIONS Hours. The average workweek for no supervisory workers in depository credit intermediation was 36.2 hours in 2008. About 8 percent of employees in 2008, mostly tellers, worked part time. Employees in a typical branch work weekdays, some evenings if the bank is open late, and Saturday mornings. However, banks are increasingly expanding the hours that their branches are open and opening branches in nontraditional locations. For example, hours may be longer for workers in bank branches located in grocery stores, which are open most evenings and weekends. To improve customer service and provide greater access to bank personnel, banks have phone centers, staffed by customer service representatives. Employees of phone centers spend most of their time answering phone calls from customers and often work evening and weekend shifts.

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Administrative support employees normally work in large processing facilities in the banks' headquarters or other administrative offices. Most support staff work a standard 40-hour week; some may work overtime. Those support staff located in the processing facilities may work evening shifts. Work environment. Branch office jobs, particularly teller positions, require continual communication with customers, repetitive tasks, and a high level of attention to security. Tellers also work for long periods in a confined space. Commercial and mortgage loan officers often work out of the office, visiting clients, checking loan applications, and soliciting new business. Loan officers may travel to meet clients, or work evenings if that is the only time at which a client can meet. Financial service-sales representatives also may visit clients in the evenings and on weekends to go over the client's financial needs. The remaining employees located primarily at the headquarters or other administrative offices usually work in comfortable surroundings and put in a standard workweek. In general, banks are relatively safe places to work. EMPOLYEMENT The banking industry employed about 1.8 million wage and salary workers in 2008. About 74 percent of jobs were in commercial banks; the remainders were concentrated in savings institutions and credit unions (table 1).

Table 1. Percent distribution of employment and establishments in banking by detailed industry sector, 2008 Industry segment Total Employment 100.0 Establishments 100.0

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Table 1. Percent distribution of employment and establishments in banking by detailed industry sector, 2008 Industry segment Employment Establishments

Monetary authorities - central bank

1.2

0.4

Depository credit intermediation Commercial banking Credit unions Savings institutions Other depository credit intermediation

98.8 73.8 12.6 11.4 1.0

99.6 71.7 13.8 13.1 1.0

SOURCE: BLS Quarterly Census of Employment and Wages, 2008.

In 2008, about 85 percent of establishments in banking employed fewer than 20 workers. However, these small establishments, mostly bank branch offices, employed 38 percent of all employees. Banks are found everywhere in the United States, but most bank employees work in heavily populated States such as New York, California, Illinois, North Carolina, Pennsylvania, and Texas. OCCUPATIONS IN THE INDUSTRY Banks employ various types of financial and customer service occupations. Office and administrative support occupations make up the largest portion of jobs in the industry, while management, business, and financial occupations also employ a significant number of employees in the banking industry.

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Office and administrative support occupations. These occupations account for 64 percent of jobs in the banking industry (table 2). Bank tellers, the largest occupation, provide routine financial services to the public. They handle customers' deposits and withdrawals, change money, sell money orders and traveler's checks, and accept payment for loans. Tellers also sell bank services to customers. New accounts clerks and customer service representatives answer questions from customers, and help them open and close accounts and apply for banking services. They are knowledgeable about a broad array of bank services and must be able to sell those services to potential clients. Some customer service representatives work in a call or customer contact center environment, taking phone calls and answering emails from customers. In addition to responding to inquiries, these workers also help customers over the phone with routine banking transactions, and handle and resolve problems or complaints. Loan and credit clerks assemble and prepare paperwork, process applications, and complete the documentation after a loan or line of credit has been approved. They also verify applications for completeness. Bill and account collectors attempt to collect payments on overdue loans. Many general office clerks and bookkeeping, accounting, and auditing clerks are employed to maintain financial

records, enter data, and process the thousands of deposit slips, checks, and other documents that banks handle daily. Banks also employ many secretaries, data entry and information processing workers, receptionists, and other office and administrative support workers. Office and administrative support worker supervisors and managers oversee the activities and training of workers in the various administrative support occupations. Management, business, and financial occupations. These occupations account for about 25 percent of employment in the banking industry. Financial managers direct bank branches and departments, resolve customers' problems, ensure that standards of service

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are maintained, and administer the institutions' operations and investments. Loan officers evaluate loan applications, determine an applicant's ability to repay a loan, and recommend approval of loans. They usually specialize in commercial, consumer, or mortgage lending. When loans become delinquent, loan officers, or loan counselors, may advise borrowers on the management of their finances or take action to collect outstanding amounts. Loan officers also play a major role in bringing in new business and spend much of their time developing relationships with potential customers. Trust officers manage a variety of assets that were placed in trust with the bank for other people or organizations; these assets can include pension funds, school endowments, or a company's profit-sharing plan. Sometimes, trust officers act as executors of estates upon a person's death. They also may work as accountants, lawyers, and investment managers. Securities, commodities, and financial services sales agents, who make up the majority of sales positions in banks, sell banking and investing services. They contact potential customers to explain their services and to ascertain the customer's banking and other financial needs. They also may discuss services, such as deposit accounts, lines of credit, sales or inventory financing, certificates of deposit, cash management, stock investments, or investment services. These sales agents also solicit businesses to participate in consumer credit card programs. At most small and medium-size banks, however, branch managers and commercial loan officers are responsible for marketing the bank's financial services. This has become a more important task in recent years. Other occupations. Occupations used widely by banks to maintain financial records and ensure the bank's compliance with Federal and State regulations are accountants and auditors, and lawyers. In addition, computer specialists maintain and upgrade the bank's computer systems.

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Table 2. Employment of wage and salary workers in banking, 2008 and projected changes, 2008-2018. (Employment in thousands) Employment, 2008 Occupation All Occupations Number Percent 1,841.7 100.0 Percent Change, 2008-18 7.9

Management, business, and financial occupations General and operations managers Financial managers Financial analysts Loan counselors and officers

464.4 31.0 76.5 17.7 138.8

25.2 1.7 4.2 1.0 7.5

11.4 -2.3 -2.2 20.0 13.6

Professional and related occupations Computer specialists

75.1 58.1

4.1 3.2

11.5 10.0

Office and administrative support occupations 1,187.1 Bookkeeping, accounting, and auditing clerks 58.7 Customer service representatives Loan interviewers and clerks Secretaries and administrative assistants 117.0 79.5 43.7

64.5 3.2 6.4 4.3 2.4

5.8 9.1 8.7 9.3 6.1

NOTE: Columns may not add to total due to omission of occupations with small employment.

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Table 2. Employment of wage and salary workers in banking, 2008 and projected changes, 2008-2018. (Employment in thousands) Employment, 2008 Occupation Number Percent Percent Change, 2008-18

SOURCE: BLS National Employment Matrix, 2008-18.

TRAINING AND ADVANCEMENT A high school education is usually the minimum required education for most office and administrative occupations, while management, business, and financial occupations usually employ workers with at least a college degree. Good communication and customer service skills are necessary for all occupations in the banking industry. Since bank employees have access to large amounts of money and confidential financial information, most positions require a background check.

Office and administrative support occupations. Bank tellers and other clerks usually need only a high school education. Banks seek people who have good basic math and communication skills, enjoy public contact, and feel comfortable handling large amounts of money. Through a combination of formal classroom instruction and on-the-job training under the guidance of an experienced worker, tellers learn the procedures, rules, and regulations that govern their jobs. Banks are offering more products and spending more

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on reaching out to their customers. As a result, banks will need more creative and talented people in their tellers windows to compete in the consumer market place. Banks encourage upward mobility by providing access to higher education and other sources of additional training. Some banks have their own training programs which result in teller certification. Experienced tellers qualify for certification by taking required courses and passing examinations. Experienced tellers and clerks may advance to head teller, new accounts clerk, or customer service representative. Outstanding tellers who have had some college or specialized training may be promoted to managerial positions. Management, business, and financial occupations. Workers in management, business, and financial occupations usually have at least a college degree. A bachelor's degree in business administration or a liberal arts degree with business administration courses is suitable preparation, as is a bachelor's degree in any field followed by a master's degree in business administration (MBA). Many management positions are filled by promoting experienced, technically skilled professional personnelfor example, accountants, auditors, budget analysts, credit analysts, or financial analystsor accounting or related department supervisors in large banks. Various banking-related associations and privately-operated schools offer courses and programs for students interested in lending, as well as for experienced loan officers who want to keep their skills current. Completion of these courses and programs generally enhances the individual's employment and advancement opportunities. The Banking Administration Institute offers the Loan Review Certificate program for persons who review and approve loans. The Mortgage Bankers Association (MBA) offers the Certified Mortgage Banker (CMB) program. A candidate who earns the CMB exhibits a deep understanding of the mortgage business. To obtain the CMB, one must have at least 3 years of experience, earn educational credits, and pass an exam.

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Financial services sales agents usually need a college degree; a major or courses in finance, accounting, economics, marketing, or related fields serve as excellent preparation. Experience in sales also is very helpful. These workers learn on the job under the supervision of bank officers. Sales agents selling securities need to be licensed by the National Association of Securities Dealers, and agents selling insurance also must obtain an appropriate license. Additional training may improve workers chances of advancing to higher level executive, administrative, managerial, and professional positions. Banks often provide opportunities and encourage employees to take classes offered by banking and financial management affiliated organizations, or other educational institutions. Classes often deal with one of the different aspects of finance and banking, such as accounting management, budget management, corporate cash management, financial analysis, international banking, and data processing systems procedures and management. Employers also sponsor seminars and conferences, and provide textbooks and other educational materials. Many employers pay for educational courses. Since the banking industry depends on technology, an understanding of banking computer systems and software can greatly improve one's skills and advancement opportunities. OUTLOOK Employment growth will be driven by increases in Americans wealth and investments and a growing number of local branches. Employment change. Wage and salary employment in banking is projected to grow 8 percent between 2008 and 2018, compared with the 11 percent growth projected for wage and salary employment across all industries.

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Banks compete strongly to attract new customers. Because convenience of local branches is one of the most important factors for customers selecting a bank, the number of local branches will continue to increase. New branches frequently will be located in nontraditional locations, such as inside grocery stores. A growing number of branches will increase employment of branch managers and tellers.

Deregulation of the industry allows banks to offer a variety of financial and insurance products that they were once prohibited from selling. Managing and selling these services will spur demand for financial analysts and personal financial advisors. Demand for "personal bankers" to advise and manage the assets of wealthy clients, as well as the aging baby-boom generation, also will grow. However, banks will continue to face considerable competition in financial services from nonbank establishments, such as insurance companies and independent financial advisor firms. The increasing number of retired baby boomers should have a beneficial effect on total employment in the banking industry. They are more likely than younger age groups to hold bank deposits and visit branches to do their banking. Many also need help in retirement planning and investing which increases demand for financial managers and personal financial advisors. efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money has become the order of the day. .

>NATIONALIZATION By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. At the same time, it has emerged as a large

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employer, and a debate has ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquition and Transfer of Undertaking) Bill, and it received the presidential approval on 9th August, 1969 . .A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India . After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

>LIBERALISATION In the early 1990s the then Narasimha Rao government embarked on a policy of liberalisation and gave licenses to a small number of private banks, which came to be known as New Generation tech-savvy banks, which included banks such as UTI Bank(now re-named as Axis Bank) (the first of such new generation banks to be set up), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, kick started the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. . The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could

exceed the present cap of 10%,at present it has gone up to 49% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. The first bank in India, though conservative, was established in 1786. From 1786 till

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today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.

New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991. Phase1 The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders . In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935 . During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority . During those days public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. Phase2 Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi-urban areas. It formed State Bank of india to act as

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the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country.
Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July, 1969, major process of nationalisation was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was nationalized . Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership .

The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country:

1949: Enactment of Banking Regulation Act. 1955: Nationalisation of State Bank of India. 1959: Nationalisation of SBI subsidiaries. 1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%. . Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

VISION OF BANKS IN INDIA The banking scenario in India has already gained all the momentum, with the domestic and international banks gathering pace. The focus of all banks in India has shifted their approach to 'cost', determined by revenue minus profit. This means that all the resources should be used efficiently to better the productivity and ensure a win-win situation. To survive in the long run, it is essential to focus on cost saving. Previously, banks focused on the 'revenue' model which is equal to cost plus profit. Post the banking reforms, banks shifted their approach to the 'profit' model, which meant that banks aimed at higher profit maximization

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FOCUS OF BANKS IN INDIA The banking industry is slated for growth in future with a more qualitative rather than quantitative approach. The total assets of all scheduled commercial banks by end-March 2010 is projected to touch Rs 40,90,000 crore. This is going to comprise around 65% of GDP at current market prices as compared to 67% in 2002-03. The bank's assets are estimated to grow at an annual composite rate of growth of 13.4% during the rest of the decade as against 16.7% between 1994-95 and 2002-03. Barring the asset side, on the liability perspective, there will be huge additions to the capital base and reserves. People will rely more on borrowed funds, pace of deposit growth slowing down side by side. However, advances and investments would not see a healthy growth rate. CONSOLIDATION OF BANKS IN INDIA Would the banking industry in India get opened up for more international competition? India would see a large number of global banks controlling huge stakes of the banking entities in the country. The overseas

banking units would bring along with it capital, technology, and management skills. This would lead to higher competition in the banking frontier and ensure greater efficiency. The FDI norms in the banking sector would give more leverage to the Indian banks. . Thus, a consolidation phase in the banking industry in India is expected in the near future with mergers and acquisitions gathering more pace. One might also see mergers between public sector banks or

public sector banks and private banks. Credit cards, insurance are the next best strategic places where alliances can be formed.

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CURRENT SITUATION OF BANKING INDUSTRY IN INDIA Currently, banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve

Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true . With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them . Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.
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>RECENT DEVELOPMENT State Bank of India has acquired 76 per cent stake in Giro Commercial Bank, a Kenyan bank for US$7 million. Bank of Baroda is planning to acquire a bank in Africa to consolidate its presence in the

continent. Canara Bank is helping Chinese banks recover their huge non-performing assets (NPA). ICICI bank is in the process of taking over Sangli Bank, a private sector bank based in Maharashtra. The RBI has recently allowed the Commonwealth Bank of Australia, Banche Popolari unite S.c.r.l. (based in Italy), Vneshtorgbank (Russian trade bank), Promsvyazbank (Russian commercial bank), Banca Popolare di Vicenza (Italian bank), Monte Dei Paschi Di Siena (Italian bank) and Zurcher Kantonalbank (Swiss bank) to set up representative offices in India. FUTURE CHALLENGES OF BANK IN INDIA The Indian banks are hopeful of becoming a global brand as they are the major source of financial sector revenue and profit growth. The financial services penetration in India continues to be healthy, thus the banking industry is also not far behind. As a result of this, the profit for the Indian banking industry will surely surge ahead. The profit pool of the Indian banking industry is probable to augment from US$ 4.8 billion in 2005 to US$

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20 billion in 2010 and further to US$ 40 billion by 2015. This growth and expansion pace would be driven by the chunk of middle class population. The increase in the number of private banks, the domestic credit market of India is estimated to grow from US$ 0.4 trillion in 2004 to US$ 23 trillion by 2050. Third largest banking hub of the globe by 2040-is that vision to far away Key points Supply Liquidity is controlled by the Reserve Bank of India (RBI). Demand be cyclical India is a growing economy and demand for credit is high though it could

Barriers to entry network

Licensing requirement, investment in technology and branch

Bargaining power of suppliers High during periods of tight liquidity. Trade unions in public sector banks can be anti reforms. Depositors may invest elsewhere if interest rates fall. Bargaining power of customers For good creditworthy borrowers bargaining power is high due to the availability of large number of banks . Competition High- There are public sector banks, private sector and foreign banks along with non banking finance companies competing in similar business segments.

ANALYSIS FOR FINANCIAL YEAR 2009 OF INDIAN BANKING INDUSTRY The liquidity crisis that swept the heavyweights of global financial sector off their feet in FY09 did affect the entities in Indian banking sector as well, albeit marginally. Other than the temporary crunch after bankruptcy of Lehman Brothers, the global financial meltdown was weathered by banks in India with relative ease. The monetary stimuli (reduction in repo rate, cash reserve ratio (CRR) and statutory liquidity ratio (SLR)) offered to the banks by the RBI made things easier. Despite the severe liquidity pressure and poor credit appetite at the retail and corporate levels, Indian banks managed to grow their advances and deposits by 24% YoY and 22% YoY respectively in FY09. The growth was mainly driven by a sharp expansion in term deposits and growth in agricultural and large corporate credit. Having said that, higher delinquency levels in retail credit and debt restructuring took its toll on the sector

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Indian Banks: Marginal signs of stress FY08 No. of banks (nos.) Branches (nos.) Employees (nos.) Networth (Rs m) 79 776 11,588 39,940 FY09 78 825 12,039 47,080 Change -1.3% 6.3% 3.9% 17.9%

Indian banks also enjoyed higher levels of money supply, credit and deposits as a percentage of GDP in FY09 as compared to that in FY08 showing improved maturity in the financial sector.

Despite poor pricing power lower cost of funds helped Indian banks grow their net interest margins in FY09. While few like ICICI Bank chose to reduce their balance sheet size, most entities chose to reasonably grow their franchise as well as assets. Public sector banks outdid their private sector counterparts in terms of growth and franchise expansion

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in the last fiscal. Improved capital adequacy also helped banks to comfortably comply with Basel II. The higher efficiency levels were the hallmarks of better performance of Indian banks last year.

Most banks had to restructure some loans in their portfolio during FY09 which deferred their interest income. Further the PSU banks had also to provide for the loss of interest on the agri-loans waived by the government.

With lesser avenues of credit disbursal, banks had to park most of the liquidity available with them with the RBI. At the end of FY09, banks' investment in SLR securities increased to 28.1% of total deposits from 27.8% in FY08 and higher than the RBI prescribed level of 24%. Feeble credit offtake

coupled with the fear of bad loans going up in the scenario of economic slowdown prompted banks to park their surplus funds with the RBI

In FY09, as per the RBI mandate, all foreign banks operating in India and Indian banks having operational presence outside India migrated to the Basel II norms. All other commercial banks have been encouraged to migrate to these approaches not later than FY10.

PROSPECTS

With banks having complied with Basel II and having sufficient capital in their books; it will be a challenge to deploy the same safely and profitably in the event of persistence of economic slowdown. Banks are likely to concentrate more on non funded income in this scenario.

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Banks, especially the private sector ones, are likely to face penetration concerns. The lack of credit penetration and the geographic concentration of bank credit is evident from the fact that 5 states having the highest proportion of per capita credit enjoy 55% of the total credit disbursals in the country.

RBI's roadmap for the entry of foreign banks and the acquisition of stake by the foreign entities in Indian private banks has been deferred for the time being. However, the tussle for higher market share in the already fragmented sector is only set to aggravate. SWOT ANALYSIS OF BANKING INDUSTRY STRENGTH Indian banks have compared favourably on growth, asset quality and profitability with other regional banks over the last few years. The banking index has grown at a compounded annual rate of over 51 per cent since April 2001 as compared to a 27 per cent growth in the market index for the same period. Policy makers have made some notable changes in policy and regulation to help strengthen the sector. These changes include strengthening prudential norms, enhancing the payments system and integrating regulations between commercial and co-operative banks .

Bank lending has been a significant driver of GDP growth and employment . Extensive reach: the vast networking & growing number of branches & ATMs. Indian banking system has reached even to the remote corners of the country . The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalisation of 14 major private banks of India .

In terms of quality of assets and capital adequacy, Indian banks are considered to have
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clean, strong and transparent balance sheets relative to other banks in comparable economies in its region .

India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is with the Government of India holding a stake)after merger of New Bank of India in Punjab National Bank in 1993, 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Foreign banks will have the opportunity to own up to 74 per cent of Indian private sector banks and 20 per cent of government owned banks.

WEAKNESS

PSBs need to fundamentally strengthen institutional skill levels especially in sales and marketing, service operations, risk management and the overall organisational performance ethic & strengthen human capital. Old private sector banks also have the need to fundamentally strengthen skill levels. The cost of intermediation remains high and bank penetration is limited to only a few customer segments and geographies. Structural weaknesses such as a fragmented industry structure, restrictions on capital availability and deployment, lack of institutional support infrastructure, restrictive labour laws, weak corporate governance and ineffective regulations beyond Scheduled Commercial Banks (SCBs), unless industry utilities and service bureaus.

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 Refusal to dilute stake in PSU banks: The government has refused to dilute its stake in PSU banks below 51% thus choking the headroom available to these banks for raining equity capital. Impediments in sectoral reforms: Opposition from Left and resultant cautious approach from the North Block in terms of approving merger of PSU banks may hamper their growth prospects in the medium term.

OPPORTUNITY The market is seeing discontinuous growth driven by new products and services that include opportunities in credit cards, consumer finance and wealth management on the retail side, and in fee-based income and investment banking on the wholesale banking side. These require new skills in sales & marketing, credit and operations. banks will no longer enjoy windfall treasury gains that the decade-long secular decline in interest rates provided. This will expose the weaker banks.

With increased interest in India, competition from foreign banks will only intensify. Given the demographic shifts resulting from changes in age profile and household income, consumers will increasingly demand enhanced institutional capabilities and service levels from banks. New private banks could reach the next level of their growth in the Indian banking sector by continuing to innovate and develop differentiated business models to profitably serve segments like the rural/low income and affluent/HNI segments; actively adopting acquisitions as a means to grow and reaching the next level of performance in their service platforms. Attracting, developing and retaining more leadership capacity Foreign banks committed to making a play in India will need to adopt alternative

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approaches to win the race for the customer and build a value-creating customer franchise in advance of regulations potentially opening up post 2009. At the same time, they should stay in the game for potential acquisition opportunities as and when they appear in the near term. Maintaining a fundamentally long-term value-creation mindset. reach in rural India for the private sector and foreign banks. With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. the Reserve Bank of India (RBI) has approved a proposal from the government to amend the Banking Regulation Act to permit banks to trade in commodities and commodity derivatives. Liberalisation of ECB norms: The government also liberalised the ECB norms to permit
financial sector entities engaged in infrastructure funding to raise ECBs. This enabled banks and financial institutions, which were earlier not permitted to raise such funds, explore this route for raising cheaper funds in the overseas markets.

Hybrid capital: In an attempt to relieve banks of their capital crunch, the RBI has allowed them to raise perpetual bonds and other hybrid capital securities to shore up their capital. If the new instruments find takers, it would help PSU banks, left with little headroom
for raising equity. Significantly, FII and NRI investment limits in these securities have been fixed at 49%, compared to 20% foreign equity holding allowed in PSU banks.

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THREATS

Threat of stability of the system: failure of some weak banks has often threatened the stability of the system. Rise in inflation figures which would lead to increase in interest rates. Increase in the number of foreign players would pose a threat to the PSB as well as the private players.

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Job prospects. Job opportunities should be favorable for office and administrative support workers because they make up a large proportion of bank employees and many individuals leave these positions for other jobs that offer higher pay or greater responsibilities. The need for skilled workers will create good job opportunities for individuals with financial services backgrounds. Future Prospects In the upcoming 12 months, hiring is likely to remain robust. Many banks are investing in training programs to upgrade worker skills to enhance their competitive edge in anticipation of the segment once more regaining its rightful place as the harbinger of development and progress. EARNINGS Industry earnings. Earnings of no supervisory bank employees involved in depository credit intermediation averaged $605 a week in 2008, compared with $798 for workers in finance and insurance industries, and $608 for workers throughout the private sector. Relatively low pay in the banking industry reflects the high proportion of low-paying administrative support jobs. Greater responsibilities generally result in a higher salary. Experience, length of service, and, especially, the location and size of the bank also are important. Wages in the banking industry also vary significantly by occupation. Wages in the largest occupations in banking appear in table 3.

Table 3. Median hourly wages of the largest occupations in depository credit intermediation, May 2008 Depository credit intermediation $42.98 37.15 25.72

Occupation General and operations managers Financial managers Loan officers

All industries $44.02 47.76 26.30

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Table 3. Median hourly wages of the largest occupations in depository credit intermediation, May 2008 Depository credit intermediation

Occupation

All industries

Executive secretaries and administrative assistants Loan interviewers and clerks Customer service representatives New accounts clerks Bookkeeping, accounting, and auditing clerks Office clerks, general Tellers

19.72 15.23 14.56 14.47 14.43 12.76 11.35

19.24 15.61 14.36 14.53 15.63 12.17 11.35

SOURCE: BLS Occupational Employment Statistics, May 2008.

Benefits and union membership. In addition to common benefits offered by many industries, equity sharing and performance-based pay increasingly are part of compensation packages for some bank employees. As banks encourage employees to become more sales-oriented, incentives are increasingly tied to meeting sales goals, and some workers may even receive commissions for sales or referrals. As in other industries, part-time workers do not enjoy the same benefits that full-time workers do.

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Very few workers in the banking industry are unionizedonly 1 percent are union members or are covered by union contracts, compared with 14 percent of workers across all industries.

ANALYST INSIGHT Interest rate fluctuations play a huge role in the profitability of a bank. Banks are, therefore, trying to get away from this dependency by generating more revenue on feebased services. Many bank financial statements will break up the revenue figures into fee-based (or non interest) and non-fee (interest) generated revenue. Make sure you take a close look at the fee-based revenue: firms with a higher fee-based revenue will typically earn a higher return on assets than competitors . Evaluating management can be difficult because so many aspects of the job are intangible. One key figure for evaluating management is the net interest margin (NIM) (defined above). Look at the past NIM

across several years to determine its trends. Ideally, you want to see an even or upward trend. Most banks will have NIMs in the 2-5% range; this might appear low, but don't be fooled - a .01% change from the previous year means big changes in profits . Another good metric for evaluating management performance is a bank's return on assets (ROA). When calculating ROA, remember that banks are highly leveraged, so a 1% ROA indicates huge profits. This

is one area that catches a lot of investors: technology companies might have an ROA of 5% or more, but these figures cannot be directly compared to banks . As with other industries, you want to know that a bank has costs under control, and that things are being run efficiently. Closely analyze the bank's operating expenses. Ideally, you want to see operating expenses remain the same as previous years or to decrease. This isn't to say that an increase in operating expenses is a bad thing, as long as revenues are also increasing .

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As we mentioned in the above section, a measure of a bank's financial health is its capital adequacy. If a bank is having difficulty meeting the capital ratio requirements, it can use a number of ways to increase the ratio. If it is publicly traded, it can issue new stock or sell more subordinated debt. That, however, may be costly if the bank is in a weak financial position. Small banks, most of which are not publicly traded, generally do not have the option of selling new stock. If the bank cannot increase its equity, it can reduce its assets to improve the capital ratio. Shrinking the balance sheet, however, is not attractive because it hurts profitability. The last option is to seek a merger with a stronger bank.

the business, banks are seeing competition rise from unconventional companies. Sony (NYSE: General Motors (NYSE:GM) and Microsoft (Nasdaq:MSFT) all offer preferred financing to
customers who buy big ticket items. If car companies are offering 0% financing, why would anyone want to get a car loan from the bank and pay 5-10% interest

Competitive Rivalry. The banking industry is highly competitive. The financial services industry has

been around for hundreds of years, and just about everyone who needs banking services already has them. Because of this, banks must attempt to lure clients away from competitor banks. They do this by offering lower financing, preferred rates and investment services. The

banking sector is in a race to see who can offer both the best and fastest services, but this also causes banks to experience a lower ROA. They then have an incentive to take on high-risk projects. In the long run, we're likely to see more consolidation in the banking industry. Larger banks would prefer to take over or merge with another bank rather than spend the money to market and advertise to people.

THE INDIAN BANKING INDUSTRY

India has a strong and vibrant banking sector comprising state-owned banks, private sector banks, foreign banks, financial institutions and regional banks including cooperative banks, rural banks and local area banks. In addition there are non-banking financial companies (NBFCs), housing finance companies,

Midi companies and chit fund companies which play the role of financial intermediaries. Since the launch of the economic liberalization and global programme in 1991, India has considerably relaxed banking regulations and opened the financial sector for foreign investment. India is also committed to further open the banking sector for foreign investment in pursuance to its commitment to the

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world trade organization (WTO).

As monetary authority of the country, the Reserve Bank of India (RBI) regulates the banking industry and lays down guidelines for day-to-day functioning of banks within the overall framework of the Banking Regulation Act, 1949, Foreign Exchange Management Act, 1999 and Foreign Direct Investment (FDI) policy of the government

History of Banking in India

Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign banks like Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which banking activity took roots there and prospered. The first fully Indian owned bank was the Allahabad Bank, which was established in 1865 . By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. . Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the

technology and any other external and internal factors.

. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even
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to the remote corners of the country. This is one of the main reasons of India's growth process. . The government's regular policy for Indian bank since 1969 has paid rich dividends with the
nationalization of 14 major private banks of India. . . . Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice.

CURRENT ISSUES

Merrill Edge Offers Lower Fees and Enhances Online Platform ON 17-01-2012 Enhancements Provide Clients With More Investment Choices, Simplified Pricing and Convenience When Managing Their Investments NEW YORK--(BUSINESS WIRE)--Jan. 17, 2012-- Bank of America today announced new enhancements to the Merrill Edge self-directed investing platform, including a simplified pricing structure for self-directed clients, a new streaming trading platform called Merrill Edge Market Pro, and additional online investment choices on merrilledge.com. The expansion of the Merrill Edge platform is just another example of how we continue to deliver investment guidance to meet the unique needs of our investment clients, said Dean Athanasia, Preferred and Small Business executive for Bank of America. Clients will get more from our platform through enhancements that offer convenient and leadingedge tools they need to help them invest, at a very competitive, simplified pricing structure. Pricing

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To continue cultivating a more user-friendly experience, Merrill Edge eliminated its fourtiered pricing structure in favor of a more streamlined, simplified approach for its selfdirected clients. All stock and exchange-traded-fund (ETF) trades have moved to a flat fee of $6.95 for self-directed investing. In addition, clients who have more than $25,000 in cash balances with Merrill Edge or Bank of America will continue to receive 30 free trades per month.1The company has also eliminated account minimums and maintenance fees for self-directed accounts. One of our top goals is to listen to our clients and deliver solutions that help them meet their needs in a way that is easy to understand, said Alok Prasad, head of Merrill Edge. Simplifying our pricing structure met a key client need, while also allowing us to take an industry-leading position. We expect about 75 percent of Merrill Edge self-directed clients will see lower per trade fees, and no client will see an increase in these fees. Platform enhancements In addition to simplifying its pricing structure, Merrill Edge has made significant improvements to the online investment experience for clients, including the development of Merrill Edge Market Pro2. Merrill Edge Market Pro is a new streaming trading platform geared toward sophisticated self-directed investors and active traders. The platform provides clients with real-time market analysis for greater control over every trade, customization and features including integrated trading, account information, in-depth streaming market data and greater access to proprietary research. The November Merrill Edge Report indicated that half of mass affluent consumers will consider reallocating their portfolios over the next six months, said Prasad. New tools like Merrill Edge Market Pro allow our clients to receive up-to-the-minute trading information to help them make decisions on their own, and give clients the choice to help them manage their investments in the way thats most convenient for them. Additional enhancements to the online platform include: Expanded Suite of Fixed Income Products: Clients have access to a full suite of fixed income instruments they can trade online, including corporate, agency, municipal and treasury securities. Enhanced Investing Research and Education Centers: Clients have improved access to expanded screeners, education, research, and third-party analysis.

Expanded Inventory of Mutual Funds: Clients have gained access to more than

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800 new mutual funds from more than 100 fund families including 600 new no-load mutual funds over the past year. New mutual funds continue to be added. Expanded Alerts: Clients can sign up to receive trade execution, market and news alerts in HTML or text-based e-mails.

In 2011, Bank of America doubled the number of Merrill Edge Financial Solutions Advisors (FSAs) to more than 1,200 nationwide in banking centers throughout the United States or in the Merrill Edge Advisory Center. These FSAs provide guidance to clients with under $250,000 in investable assets.
1

$0 trades are only available with an individual or joint Merrill Edge self-directed brokerage account. MLPF&S waives its commission fee for as many as 30 monthly online equity trades, including stock and exchange traded funds (ETFs) for customers who meet any one of the following criteria: Combined total of $25,000 or more in your deposit accounts at Bank of America, N.A. When you make a trade, MLPF&S determines whether you meet the balance requirement to qualify that trade for the $0 waiver. MLPF&S adds the average collected balances in your deposit accounts as of the prior month to the balances in your bank CD and IRAs as of the prior business day. Bank deposit accounts with the same social security number (SSN) as the (SSN)(s) on the self-directed brokerage account are systematically included in the balance determination. If this calculation reflects a combined total of less than $25,000, a second calculation is made. To determine the 30trade limit, MLPF&S adds the qualifying trades in your individual accounts and joint accounts. Commission fees apply when the balance requirement is not met, or when you exceed 30 qualifying trades a month. Brokerage fees associated with, but not limited to, margin transactions, option trading, special stock registration/gifting, account transfer and processing, account maintenance, research request and termination apply. See merrilledge.com for details. Standard deposit account fees apply. Relationship requirements and pricing are subject to change. Or combined balance of $25,000 or more in cash balances in one or both of the following sweep options in your Merrill Edge self-directed account(s) as of the prior business day:
o o

Bank Deposit Accounts sweep option with your CMA Retirement Assets Savings Program II sweep with your IRA.

This offer does not apply to Business/Corporate Accounts, Investment Club Accounts, Partnership Accounts and certain fiduciary accounts held at MLPF&S.
2

Merrill Edge Market Pro is available to Merrill Edge self-directed only relationships. To qualify, you must have total combined balances of more than$50,000 in your Merrill Lynch investment accounts and Bank of America, N.A. deposit accounts or make greater

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than 60 self-directed trades a year. For more details on how balance and trading requirements are determined, see merrilledge.com/marketpro. Relationship requirements are subject to change. The information provided by Merrill Edge Market Pro is not a recommendation of a transaction or investment strategy involving a security or securities. It also is not an offer to sell. The information provided does not take into account your particular investment objectives, financial situation or needs, or tax status and should not be used or construed as an indicator of future performance. Before acting on any of the information, you should consider whether it is appropriate for your particular circumstances and, if necessary, seek professional advice. Bank of America Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 58 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,750 ATMs and awardwinning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. For more Bank of America news, visit the Bank of America newsroom. www.bankofamerica.com Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing. MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation.

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Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Bank of America Hires More Than 50 Small Business Bankers Across Massachusetts, Connecticut and Rhode Island ON 30-01-2012 Includes 13 New Small Business Bankers in Greater Boston BOSTON--(BUSINESS WIRE)--Jan. 30, 2012-- Bank of America today announced that it is hiring more than 50 small business bankers in New England to provide guidance and counsel to local small business owners. The additions are part of the companys previously announced plan to hire 1,000 small business bankers across the nation by mid2012. Through a relationship with a Bank of America small business banker, clients will have convenient access to local small business expertise and a dedicated resource who knows their business. Small business bankers will consult with small business owners at their place of business and assess their companies' deposit, credit and cash management needs. These new hires will support the unique needs of small business owners in the following regions:

Massachusetts 32 hires, including 13 in Greater Boston. Connecticut 14 hires. Rhode Island 5 hires.

For well over 200 years, New England has been a pioneer of entrepreneurial innovation, and Bank of America is proud to be supporting the regions entrepreneurial heritage, said Bob Gallery, Massachusetts president for Bank of America. Our small business bankers will provide business owners inNew England with the tools they need to continue to be the engine that drives our local and national economy forward. In Massachusetts alone, there are 594,487 companies with fewer than 500 employees. Of these, 138,846 are employers, accounting for almost half (47.8 percent) of private-sector

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jobs in the state. Moreover, small businesses in total, both employers and non-employers, make up 97.9 percent of the states businesses, according to the U.S. Small Business Administration. In Connecticut and Rhode Island, the number of companies with fewer than 500 employees exceeds 400,000. Each of these businesses faces its own set of challenges that require specialized attention from a small business banker who understands the unique issues they face, as well as of the customers they serve. Our bankers spend the time needed with each of our clients to fully understand their deposit, credit, payroll and cash management needs, while serving as a conduit to experts across the Bank of America franchise, said Raj Kochhar, Small Business Banking region executive for the Northeast. They can help small business owners with complex issues ranging from commercial real estate needs to providing the right retirement solutions for themselves and their employees. Bank of America continued to actively lend to small businesses across the U.S. in 2011, extending $6.4 billion in new originations to small businesses. This increased new credit to small businesses by 20 percent in 2011, enabling the bank to exceed its small business lending pledge to the White House and the SBA. Bank of America is the leading bank supporting Community Development Financial Institutions (CDFIs), providing more than $200 million to finance small businesses that cant qualify for traditional loans. The CDFI grant program, created in 2010 to unlock low-cost capital for small businesses, has allowed CDFIs to access more than $93 million, serving over 8,700 local businesses and helping to retain more than 13,000 jobs. Following a June 2010 announcement, Bank of America increased its spending with small, medium-sized and diverse businesses through a commitment to purchase $10 billion in products and services from those suppliers over five years. Other efforts to help small businesses include a new suite of small business charge cards that give businesses more choice and control over their payment and expense management needs. Additionally, Bank of America has made recent improvements to the bank's two million small business credit card accounts, such as no penalty rate increases on existing balances. Additional enhancements have been made to the Advisor Alliance retirement plan platform, which serves more than 950,000 people from more than 40,000 businesses. Advisor Alliance combines Merrill Lynch investment and advisory services with a choice of diverse, committed partners to provide competitive recordkeeping and

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plan administration services for businesses retirement plan needs. Bank of America Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,750 ATMs and awardwinning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

J.D. Power and Associates Recognizes Merrill Edge Call Centers for Customer Service Excellence ON 06-02-2012 CHARLOTTE, N.C.--(BUSINESS WIRE)--Feb. 6, 2012-- Bank of America today announced that Merrill Edge call centers have been recognized by J.D. Power and Associates for providing An Outstanding Customer Service Experience. Merrill Edge provides mass affluent customers access to professional investment guidance through Merrill Edge Financial Solutions Advisors in the Merrill Edge Advisory Center or in person at select banking centers. For customers who prefer to invest on their own, Merrill Edge provides an online self-directed investing platform, with robust tools and resources to help them make informed investment decisions. This designation acknowledges the strong commitment Merrill Edge has to providing customers with a positive and superior experience that exceeds their expectations, said Alok Prasad, head of Merrill Edge. We will continue to listen to our customers and make improvements to deliver outstanding service to them.

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Merrill Edge went through a very rigorous due diligence process to receive this recognition. The process included a customer satisfaction survey conducted independently by J.D. Power and Associates, an in-depth review of internal practices including recruiting, training, employee incentives, quality assurance capabilities, and management roles and responsibilities, as well as site visits to each of the centers to validate those practices with associate focus groups. The survey evaluation criteria included the customer service representatives courtesy, knowledge and concern for the customer; promptness in speaking to a person; and timely resolution of the problem or request. Bank of America Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,750 ATMs and awardwinning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. For more Bank of America news, visit the Bank of America newsroom. www.bankofamerica.com For J.D. Power and Associates 2011 Call Center Certification ProgramSM information, visit www.jdpower.com. Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing. MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary

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of Bank of America Corporation. Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

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<< Back NEW YORK--(BUSINESS WIRE)--Mar. 22, 2012-- Bank of America today announced a number of new online and mobile capabilities for its Merrill Edge customers. These new capabilities include a Merrill Edge Android application, remote check deposit functionality for iPhones1, bill-pay functionality for iPads and a new Investment Product Education Center within MerrillEdge.com. The November Merrill Edge Report* indicated that a quarter of mass affluent respondents are avid users of mobile banking, and use it to check account balances, transfer funds and pay bills, said Alok Prasad, Merrill Edge executive. Merrill Edge continues to invest in new tools and enhancements to allow our customers to access and manage their Merrill Edge investment accounts anywhere at any time, helping them to stay in control of their finances. The new Merrill Edge Android application allows its customers a simple and convenient way to view investment balances, place trades, research investments and transfer funds between their linked banking and investment accounts. Bill-pay functionality through Merrill Edges upgraded iPad application enables eligible customers to schedule, edit or manage online bill payments. In addition, remote check deposit functionality is now available on Merrill Edges upgraded iPhone application. This new feature allows Merrill Edge customers to quickly and easily take a picture of a check with their iPhone and have it deposited directly into their qualifying Merrill Edgeinvestment account. Merrill Edge is providing these enhancements while maintaining a high level of security to help protect customers against fraud and identity theft. In addition, the Investment Product Education Center provides Merrill Edge customers with easy access to research stocks, options, ETFs, mutual funds and fixed income products. Customers will have access to investment: news, research, reports, education, articles, analysis and other key functionality. Our customers want more convenient access to their accounts and the ability to invest through a variety of emerging technologies, said Paul Vienick, Merrill Edge SelfDirected Investing executive. As technology evolves, we will continue to offer access to a broad array of mobile and online services with high levels of security. The addition of these new enhancements expands Merrill Edges online and mobile capabilities while continuing to offer customers simple and convenient ways to invest with Merrill Edge. Over the past year, Merrill Edge has expanded its website functionality and educational resources, tools, and investment research to assist customers with making informed investment decisions. Merrill Edge has also previously announced mobile applications for iPhone, iPad and BlackBerry. In addition, Merrill
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KEY COMPETITOR

KEY Competitors Direct Competitor Comparison BAC C JPM WFC Industry Market Cap: 102.28B 106.93B 172.26B 178.97B 39.57M Employees: 282,000 Qtrly Rev Growth (yoy): 27.10% Revenue (ttm): 80.04B Gross Margin (ttm): N/A EBITDA (ttm): N/A Operating Margin (ttm): 13.37% 266,000 5.80% 66.58B N/A N/A 22.01% 260,157 264,200 198 10.40% 26.06M 0.00% N/A 23.67% N/A 0.36 14.3 1.71 1.64

-16.30% 0.90% 89.66B N/A N/A 36.24% 73.03B N/A N/A 36.70% 15.02B 2.82 12.04 1.11 2.45

Net Income (ttm): 84.00M 10.74B 17.57B EPS (ttm): 0.01 3.63 4.48 P/E (ttm): 953 10.07 10.19 PEG (5 yr expected): 0.93 0.94 1.26 P/S (ttm): 1.28 1.61 1.92 C = Citigroup, Inc. JPM = JPMorgan Chase & Co. WFC = Wells Fargo & Company Industry = Regional - Mid-Atlantic Banks Banks Ranked By Assets Company Citigroup, Inc. Mizuho Financial Group, Inc. Symbol C Price 36.51 Change N/A

Market Cap

P/E

106.93B 10.07

MFG

3.28

0.00%

39.34B

12.71
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Sumitomo Mitsui Financial Group Inc. UBS AG Deutsche Bank AG HSBC Holdings plc JPMorgan Chase & Co. UniCredit Bank AG Credit Suisse Group

SMFG UBS DB HBC JPM "Private" CS

6.71 13.91 49.51 43.96 45.67

0.00% 0.00% 0.00% 0.00% N/A

9.26B 52.12B 44.79B

2.1 11.62 8.64

155.94B 9.66 172.26B 10.19

28.41

0.00%

34.67B

18.91

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o o o o

Political factors Banking act, 1949 (code of conduct) Rules of Reserve Bank of India CRR Interest rates( both deposit & loan) Bank rate Indian Banking Association IT act, 1961 Growth of subsidiary companies

2.
o

Economic factors: Money inflation & deflation Industrial growth Liberalization & globalization policies Capital market requirement

3.
o

Social factors: Banking habits Individual requirement Income level Society status and aspiration values

4.
o

Technical factors: Product innovation ATPAR icontact Redemption of mutual funds

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Travel currency card Focus on increasing the servicing level by technical

enhancement

PORTERS 5 FORCES ANALYSIS Threat of New Entrants. The average person can't come along and start up a bank, but there are services, such as internet bill payment, on which entrepreneurs can capitalize. Banks are fearful of being squeezed out of the payments business, because it is a good source of fee-based revenue. Another trend that poses a threat is companies offering other financial services. What would it take for an insurance company to start offering mortgage and loan services? Not much. Also, when analyzing a regional bank, remember that the possibility of a mega bank entering into the market poses a real threat.
2

Power of Suppliers. The suppliers of capital might not pose a big threat, but the threat of suppliers luring away human capital does. If a talented individual is working in a smaller regional bank, there is the chance that person will be enticed away by bigger banks, investment firms, etc.
3

Power of Buyers. The individual doesn't pose much of a threat to the banking industry, but one major factor affecting the power of buyers is relatively high switching costs. If a person has a mortgage, car loan, credit card, checking account and mutual funds with one particular bank, it can be extremely tough for that person to switch to another bank. In an attempt to lure in customers, banks try to lower the price of switching, but many people would still rather stick with their current bank. On the other hand, large corporate clients have banks wrapped around their little fingers. Financial institutions - by offering better exchange rates, more services, and exposure to foreign capital markets - work extremely hard to get high-margin corporate clients.
4

Availability of Substitutes. As you can probably imagine, there are plenty of substitutes in the banking industry. Banks offer a suite of services over and above taking deposits and lending money, but whether it is insurance, mutual funds or fixed income securities, chances are there is a non-banking financial services company that can offer similar services. On the lending side of
5

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the business, banks are seeing competition rise from unconventional companies. Sony (NYSE: General Motors (NYSE:GM) and Microsoft (Nasdaq:MSFT) all offer preferred financing to customers who buy big ticket items. If car companies are offering 0% financing, why would anyone want to get a car loan from the bank and pay 5-10% interest Competitive Rivalry. The banking industry is highly competitive. The financial services industry has been around for hundreds of years, and just about everyone who needs banking services already has them. Because of this, banks must attempt to lure clients away from competitor banks. They do this by offering lower financing, preferred rates and investment services. The
6

banking sector is in a race to see who can offer both the best and fastest services, but this also causes banks to experience a lower ROA. They then have an incentive to take on high-risk projects. In the long run, we're likely to see more consolidation in the banking industry. Larger banks would prefer to take over or merge with another bank rather than spend the money to market and advertise to people.

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CHAPTER-3

PRODUCTS OF BANK OF AMERICA

PRODUCTS OF BANK OF AMERICA

CARDS

Credit Cards Debit Cards Gift Cards CashPay Payroll Cards Debt Consolidation NEW Commercial Prepaid Cards

CREDIT CARD First, what types of credit cards are available? Get started by learning about the different types of credit cards:
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Standard credit cards typically have lower credit limits, fewer benefits than premium cards and are designed to provide basic credit card services. Premium credit cards, such as platinum cards, offer higher credit limits and usually have extra features, including product warranties, purchase protection, travel insurance and emergency services. Rewards credit cards offer reward points based on the amount of your purchases. Rewards can include cash, travel, merchandise or shopping discounts. Some offer a combination of these. Standard, premium and even private label cards (department store cards, for example) may also offer rewards. Private label credit cards can offer special deals but can only be used at one or a few stores. Affinity credit cards show your support for a group or cause such as a charity, a college or a sports team. In some cases, contributions are made to the group whenever you use the card. Secured credit cards often require a security deposit that becomes the credit limit for the account. They can be used just like any other credit card, and they can help build your credit because your payment history is reported to the major credit bureaus. BankAmericard

A competitive APR and no annual feePlease see Terms and Conditions, along with a great introductory rate

Our lowest available interest rate among all BankAmericard products Low Intro APR on purchases and balance transfers Enjoy Purchase Replacement coverage on lost, damaged or stolen purchases

DEBIT CARD An optional feature for personal checking account customers, the Bank of America debit cardFootnote1 is a fast and easy way to pay. Purchase amounts are automatically deducted from your checking account, just like checks, so you don't pay interest charges.

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Enroll in the Keep the Change program and save money with every debit card purchase. We'll even match a portion of your savings: up to $250.Footnote3

Earn up to 20% cash back when you use your Bank of America debit card through

the Add It Up programinformational bubble. Activate link and tab to read content. Footnote4.

GIFT CARD The Bank of America Merrill Lynch Visa Reward Card A reward your employees and customers will appreciate

Designed for companies Perfect for incentives or premiums for employee and customer reward programs Choose from multiple card designs or design your own Include your corporate logo Choose the dollar amount from $10 to $2,500

Reward of choice

Easy and safe to use Accepted anywhere Visa Debit is accepted at stores, via phone or Internet Card activation and balance available online and over the phone 24/7

CARSH PAY PAYROLL CARDS The Bank of America CashPay Visa payroll card is a reloadable prepaid card that provides a secure, convenient, low cost alternative to payroll checks. Your money is automatically direct deposited into your own individually-owned account where you can access your pay 24 hours a day via purchases everywhere Visa debit cards are accepted, pinned point-of-sale terminals, and ATMs.

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Save time Easy access to funds by 9 a.m. (standard direct deposit availability of funds) and no waiting in line to cash your paycheck. Convenient Use for purchases everywhere that Visa debit cards are accepted, pinned point-ofsale terminals, and to withdraw cash at virtually any ATM. Secure No need to walk around with large amounts of cash. If you lose your card it can be easily replaced. Eliminates check-cashing cost Some check-cashing stores charge up to 15 percent of face value to cash checks. Improves control over money Take only what you need, when you need it. Instant account information Available 24 hours a day, 7 days a week.

COMMERCIAL PREPAID CARDS

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With the Bank of America Commercial Prepaid Card, you can purchase goods and services, make purchases online, or pay bills. Get instant access to your funds 24 hours a day, seven days a week at more than 800,000 PLUS ATMs or anywhere Visa is accepted.

Convenience Use the card for purchases everywhere that Visa debit cards are accepted and to withdraw cash at virtually any ATM.1

Security No need to walk around with large amounts of cash. If you lose your card it can be easily replaced. Plus, youre protected against fraudulent use of your card by Visas Zero Liability policy.

Instant account information Available online 24 hours a day, 7 days a week or through an automated voice response system.

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Home Buying, Loans & Lines of Credit

Mortgages Buying a Home NEW Refinance Home Equity Real Estate Center

Mortgages

Whether you're a first-time homebuyer or are looking to buy your next home, our expert mortgage loan officers are here to answer your questions so you have a clear understanding of what you can comfortably afford. With a loan from Bank of America, you get our Clarity Commitment document, a 1-page loan summary written in easy-tounderstand language highlighting the key terms of your home loan.1

Buying a Home NEW

Bank of America Home Loan Guide is designed to provide you with personalized answers, walking you through the entire home loan processfrom understanding affordability through your loan options and the loan process itself.

Mortgage Monthly Type Payment 30-Year Fixed 15-Year Fixed Average Typically Higher

Interest Rate Average Typically Lower

Rate Changes Never Changes Never Changes

Interest Paid Average Typically Lower

Build Equity Average Typically Faster

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5/1 ARM

Low for the first 5 years

Typically Lower

Fixed for the first 5 Varies years, varies thereafter

Average

Refinance Whether youre looking at refinancing your mortgage to lower your monthly mortgage payment, switch to a fixed rate, or for jumbo loan customers wanting to get cash out to finance a major expense, we have the mortgage refinance information you need. Well help you understand the mortgage refinancing process and provide information to consider in your decision and, when you get a refinance loan with us, youll receive our 1-page Clarity Commitment document, which explains key loan terms in easy-to-understand language.

Home EquitY Home equity loans and home equity lines of credit can be used to make home repairs, consolidate debt, invest in education or finance other necessary expenses. This can be a smart way to use the home equity that you have built up in your home. The choice between a home equity loan or HELOC can depend on your personal situation and preference. A home equity line of credit offers greater flexibility with easy access to funds on an ongoing basis with different available rate options, whereas home equity loans are preferable for those who require a one-time payout with fixed repayments, giving you greater stability in your loan. Whichever way

you choose to access your home equity, Bank of America has the options and expertise to help guide you through your decision.

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Vehicle & Other Loans Auto Loans RV Loans Boat Loans Aircraft Loans NEW Practice Loans NEW Access Loans

Auto LoanS Auto Loans from Bank of America Great fixed rates on new, used and refinanced auto loansonly $311.00 a month for a $25,000 new car1 Expansive network of Bank of America preferred dealers

Multiple options, including dealer purchase, private party purchase, refinance and lease buyout

RV Loans

RV Loan Features

Competitive rates and flexible terms Fixed-rate RV loans No prepayment penalty

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Fast, easy online application Dedicated customer service representatives Multi-vehicle loan discount

RV loan types

New vehicle Used vehicle (dealer or private party) RV loan refinance

Boat Loans

Boat Loan Features

Competitive rates and flexible terms Fixed-rate boat loans No prepayment penalty Fast, easy online application Dedicated customer service representatives Multi-vehicle loan discount

Boat Loan types

New boat Used boat (dealer or private party) Refinance boat loan

Aircraft Loans NEW

Our experienced aircraft loan specialists are ready to walk you through the process as you make your purchase, finance upgrades or refinance your current aircraft.

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Financing for new or used aircraft* Personal use Competitive fixed rates and fees No prepayment penalty

Apply onlinefor an aircraft loan or call 1.800.62.PLANE (1.80

Practice Loans NE hether you're buying your first practice or thinking about selling your existing one, our team of experts can provide the experience and industry knowledge you need. Buying a practice: Loans from $50,000 to $5,000,000 100% practice financing plus working capital available

Buyer/Seller referral network Demographic site analysis Fixed rate terms up to 20 years

Deferred and interest-only payment plans available Combined practice and real estate loans available Easy Express Application for amounts up to $100,000 Additional line of credit available

Selling a practice: Discounted practice evaluations through our national network of Practice Brokers

Partnership buy-in programs Buyer/Seller referral network

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International Banking Services Foreign Currency UPDATED Travelers Cheques SafeSend Money to Mexico International Wire Transfers

Foreign Currency UPDATED eed funds for international vacation or business travel? Bank of America gives you the most convenient, secure options for ordering cash and travelers cheques in a foreign currency. Help for users of screen readers opens in new window

Top Ordered Currencies All Currencies by Country Rate (USD)

Currency

Great Britain Great Britain Pound Sterling (GBP) 1.6756

Order Now

European Union Euro (EUR)

1.4038

Order Now

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Switzerland Swiss Franc (CHF)

1.1730

Order Now

Canada Canadian Dollar (CAD)

1.0673

Order Now

Australia Australian Dollar (AUD)

1.1198

Order Now

TravelersCheques

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Another factor that governs the marketing plans is the marketing mix elements. Marketing mix elements are the sets of factors that help firms to achieve their targets of reaching the products to the consumers and also achieve organizational objectives. The importance of marketing mix is, that it takes into BANK OF AMERICA 4's of marketing, that are Product, Price, Promotion and Place of distribution

MARKETING MIX OF THE COMPANY

The marketin is probably most famous marketing elements are basic, components

g mix the term.Its the tactical of a

marketingplan. Also known as the Ftheir P's, the marketing mix elementsare price, place, product, and promotion. Product - It must provide value to a customer but does not have to be tangible at the same time. Basically, it involves introducing new products or improvising the existing products.

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Price - Pricing must be competitive and must entail profit. The pricing strategy can comprise discounts, offers and the like. Place - It refers to the place where the customers can buy the product and how the product reaches out to that place. This isdone through different channels, like Internet, wholesalers andretailers.

Promotion - Bank of America has launched a social network. Sort of. Its a site for small business owners to be part of theSmall Business Online Community, where they can share stories with each other, find experts in various topics, and network with each other. Wow.

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 Deposits Bank of america accept the deposits of the public. In order to attract the savings of the people, the bank provides every sort of facility and inspiration to them and collects the scattered savings of the society. The bank opens an account of those people who deposit their savings with the bank. These deposit accounts can mainly be of three types and people can open any of these three types of accounts according to their wish. These accounts arecurrentaccount, saving bank account, fixed deposit account.

1 Segmentation, Targeting, Positioning OF BANK OF AMERICA

Defining market segmentation Market segmentation is the process of viewing a heterogeneous market (i.e., a marketcharacterised by divergentdemand) as consistingof a number of smaller and more homogeneousparts, called segments (Harrison, 2002)

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 In its ultimate form, market segmentation results in each customer being served differently, i.e., individual marketing

However, due to its high-cost, individual marketingrarely is the case in consumer marketsHow a market looks like, before segmentationHow a market looks like, after segmentationWhy do different market segments exist and need to be treatedseparately? Because there are differences in the buying processthat customers followNeedRecognitionSearch forInformationPrepurchaseAlternativeevaluationContinuous Purchase Consumption Postpurchaseevaluation

SEGMENTATION

Bank of America are using banking customer segmentation models in order to service various types of customers within the same bank. Bank of America offers investment vehicles for customers considering market based securities. They formed a partnership with Merrill Lynch that offers brokerage services in order to develop Bank of Americas wealth management business and attract customers with additional investment needs. This is a growing market that many banks want to tap into.

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Bank of America Corporation, through its subsidiaries, provides various banking and financial products and services to individual consumers, small-and middle-market businesses, institutional investors, corporations, and governments in the United States and internationally. The companys Deposits segment provides traditional savings accounts, money market savings accounts, CDs and IRAs, and noninterest-and interestbearing checking accounts, as well as investment accounts and products. Its Card Services segment issues credit and debit cards in the United States providing a range of lending products, including co-branded and affinity products. The companys Consumer Real Estate Services segment offers a line of consumer real estate products and services comprising fixed and adjustable-rate first-lien mortgage loans for home purchase and refinancing needs, home equity lines of credit, and home equity loans. Its Global Commercial Banking segment provides a range of lending-related products and services, integrated working capital management, and treasury solutions to business banking and middle-market companies, commercial real estate firms, and governments. The companys Global Banking & Markets segment offers advisory services, financing, securities clearing, settlement, and custody services to institutional investor clients; debt and equity underwriting and distribution; merger-related and other advisory services; and risk management products. Its Global Wealth & Investment Management segment provides brokerage, banking, and retirement products; wealth structuring, investment management, trust and banking needs, and asset management services; and institutional and personal retirement solutions. As of December 31, 2011, the company served customers through a network of 5,700 banking centers, 17,750 ATMs, call centers, and online and mobile banking platforms. Bank of America Corporation was founded in 1874 and is based in Charlotte, North Carolina.

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the benefits of BANK OF AMERICA market segmentation (I) It operationalises the concept that a company cannot be all things to all people (i.e., the blanket approach) By excluding certain segments, a BANK OF AMERICA focuses its efforts and resources on a narrower target and gains deep knowledge of the needs of that target It drives costs down, by enabling a closer match of corporate resources with a segments requirements In enhances customer satisfaction by addressing customer requirements more accurately

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BANK OF AMERICA Segmentation process Identify segmentation criteria Conduct market research Apply cluster analysis (advanced statistical technique e.g. use of SPSS, Statistica software packages)

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TARGET

Bank of America target's college student's by offering many good benefits, such as, "free student checking for college student's as well as a student saving's account." Bank of America also has student credit cards to help college students. BOA refers any college student's or potential college student to visit the BOA student center.

Many of BOA's publics are college student's, small to major business owners, as well as it's own employees. It's important that college students know who their bank is targeting and how can BOA make your life a little less stressful.

As far as other publics, BOA says,"Our dedicated client teams serve the needs of growing companies with annual revenue over $2.5 million, middle-market and large corporations, institutional investors, financial institutions and government entities

Bank of America flexes its marketing and brand muscle to dominate the search landscape

As the nations first coast-to-coast banking operation, Bank of America has more than 5,700 retail banking offices and close to 17 million ATMs that serve more than

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55 million consumer and small business customers. Numbering 20 million, its active online banking customer base is likely the largest of any financial services firm.

POSITIONING Bank of America to Unveil New Brand Campaign Celebrating the Power of Oportunity New Positioning Reflects Company's Strengths and Long-Standing Commitment to Helping Customers Achieve their Goals CHARLOTTE, N.C., Feb. 22 /PRNewswire/ -- Bank of America today announced "Bank of Opportunity," the theme of its new brand positioning. Supported by the bank's largest advertising campaign to date, which will debut during ABC's telecast of the 79th Academy Awards(R), the new brand positioning reflects Bank of America's unique role in helping individuals, businesses and communities around the world realize opportunities to achieve their goals. (Logo: http://www.newscom.com/cgi-bin/prnh/20050720/CLW086LOGO-b ) "We see the opportunities that our customers see, and our ability to help them realize those opportunities defines our success," said Kenneth D. Lewis, chairman and chief executive officer, Bank of America. "Bank of Opportunity articulates a powerful value proposition that acknowledges our unique ability to understand and anticipate customer needs, to develop products and services that meet those needs and then to deliver for the customer better than any other financial institution in the country."

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Providing Opportunity to All Customers The new brand positioning reflects Bank of America's business strengths and global presence, highlighting the company's unmatched ability for enabling all its customers to achieve their goals - from buying a first home to planning for retirement, from starting a business to expanding into new markets. For the more than 55 million consumers and small businesses it serves, Bank of America continues to develop new customer-inspired solutions such as the Keep the Change(TM) savings program), the Business 24/7(TM)) portfolio for small businesses and the free ($0) online equity trade offering For corporate clients, Bank of America plays a leading role in many of the world's largest transactions - including the two largest leveraged buyouts in history - reflecting worldclass corporate banking resources and expertise that help businesses grow and prosper. As a leading community partner, Bank of America's 10-year $750 billion community lending and investment goal s&destination=nba/community/index.cfm?template=cdb_threefiftybillionni) and $1.5 billion philanthropic commitment inspire new economic opportunities that help communities nationwide grow stronger and more vibrant. "'Bank of Opportunity' is the natural progression of our brand, and reflects how our heritage and our strong competitive position drive what we do today," said Anne M. Finucane, chief marketing officer, Bank of America. "It speaks to all of our businesses and capabilities, and how we are positioned to serve our customers today, and into the future." Launching the Campaign Bank of America will support its new brand positioning through an integrated marketing campaign, which includes a mix of national and local television, radio, print, online and outdoor advertising. The initial series of TV ads will premiere prior to, and during the ABC telecast of the Academy Awards on Sunday, February 25. The first spot, entitled "Windows of Opportunity" (:60/:30), creatively uses Bank of America's "Flagscape" symbol as a window through which a series of individuals envision Bank of America helping each of them to realize their opportunities. The new campaign also will include TV ads featuring Bank of America's home equity product s&destination=nba/loansandhomes/index.cfm?template=lc_home_equity_loc) and Keep the Change(TM) savings program. In the coming weeks, Bank of America will introduce additional ads featuring select products and services that will run during multiple primetime network programming and in prominent publications. An integrated team of Omnicom Group agencies, led by BBDO-New York, worked with Bank of America to develop the "Bank of Opportunity" brand positioning and campaign.

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Bringing Opportunity to Life To celebrate the new brand positioning, Bank of America will help consumers in 15 U.S. cities "wake up to opportunity" on February 26 by providing coupons good for one cup of coffee from a variety of retailers. These include: Au Bon Pain(R), Bruegger's(R), Dunkin' Donuts(R), Einstein Bros. Bagels(R), Gloria Jean's Coffees(R), Great Harvest Bread Co.(R), Noah's(R) and The Coffee Bean(R). Coupons will be available in Bank of America's retail banking centers in Atlanta, Boston, Charlotte, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, Phoenix, San Diego, San Francisco, Seattle and Washington, D.C. In select markets, notable individuals who exemplify "opportunity" will join teams of Bank of America associates to distribute hot cups of coffee to consumers. These individuals include: former Boston Red Sox catcher Carlton Fisk; former New York Yankees outfielder Dave Winfield; former Washington Redskins defensive back Darrel Greene; former Chicago Cubs outfielder Andre Dawson; former Philadelphia Phillies first baseman John Kruk; former San Francisco Giants first baseman J.T. Snow; and former Boston Celtics guard and CIAA alum Sam Jones. Over the coming weeks and months, Bank of America will deploy additional elements designed to demonstrate "opportunity" and bring the new brand positioning to life for customers, associates, shareholders and communities. These elements include: -- Major Charitable Grants - In key markets across the U.S., Bank of America will announce significant charitable donations to address the most critical needs of those communities. In 2007, Bank of America will donate more than $200 million to nonprofit organizations serving the needs of the neighborhoods where we operate.

-- Opportunity Forecast - Bank of America has commissioned a comprehensive national survey to examine opportunities people see for themselves, their families, their businesses and their communities. Findings will be released in the spring.

Bank of America

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Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 55 million consumer and small business relationships with more than 5,700 retail banking offices, through more than 17,000 ATMs and award-winning online banking with more than 21 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 175 countries and has relationships with 98 percent of the U.S. Fortune 500 companies and 80 percent of the Global Fortune 500. Bank of America Corporation stock (NYSE:BAC) is listed on the New York Stock Exchange. Bank of America, N.A. Member FDIC.

PROMOTION STRATEGIES Bank of America has launched a social network. Sort of. Its a site for small business owners to be part of theSmall Business Online Community, where they can share stories with each other, find experts in various topics, and network with each other. Wow. This online community is set up somewhat like LinkedIn, where business info such as location, website, annual revenue and other information is shared on the profiles. The purpose of this site is to allow Bank of America be that singular resource for small businesses. You dont need to be a Bank of America user in order to join the site, so what youll get once you log on to this community is a network of business people that are sharing their stories with each other, as well as access to articles from industry experts.

This format of mentorship is pretty straight forward, and those that provide the most amount of quality content will be promoted throughout the site. And guess what else will be promoted here? Bank of America products. This form of online networking has been used time and time again for drug companies looking to create hubs of potential and existing patients, do a little market research, and get new ways to push products to

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consumers.Coca Cola and Reebok have also launched social networks under a similar guise.

Different Products and Services Deposits Bank of america accept the deposits of the public. In order to attract the savings of the people, the bank provides every sort of facility and inspiration to them and collects the scattered savings of the society. The bank opens an account of those people who deposit their savings with the bank. These deposit accounts can mainly be of three types and people can open any of these three types of accounts according to their wish. These accounts arecurrentaccount, saving bank account, fixed deposit account.

Loans The bank just dont keep with themselvesthe deposited amount of the people, rather theyadvance them in the form of loans to thebusinessman and entrepreneurs, just to earnprofitsfor their partners. The loanee keeps some gold,silver, fixed and variable assets in theform ofsecurity with the bank. The bank can advance loanto their customers in three ways: overdrafts,money at call, discounting bills of exchange.Marketing Approach to Banking Services

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 Identifying the customers financial needs and wants.

Develop appropriate banking products and services to meet customers needs.

Determine the prices for the products/services developed.

Advertise and promote the product to existing and potential customer of financial services.

Set up suitable distribution channels and bank branches.

Forecasting and research of future market needs. From the above discussion of bank marketing, it can be understood that the existence of the bank has

little value without the existence of the customer. The key task of the bank is not only to create and

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win more and more customers but also to retain them through effective customer service. Customers

are attracted through promises and are retained through satisfaction of expectations, needs and wants.

Marketing as related to banking is to define an appropriate promise to a customer through a range ofservices (products) and also to ensure effective delivery through satisfaction. The actual satisfaction delivered to a customer depends upon how the customer is interacted with. It goes on to emphasisethat every employee from the topmost executive to the junior most employee of the bank is market.

Customers expectations are high from the service industry like a banking industry. Only those bank will survive who will provide efficient and customer desired services.

Emphasis on DepositsEmphasis, though in a discrete manner, should be given to mobilize more of term deposits as they arepreserve them for themselves and do not take interest in educating the customers. It is a need toeducate the customers

from the grassroots of banking. It is time that each bank branch takes steps to educate the customers on all banking function, which will facilitate growth of banking on healthy lines both qualitatively and quantitatively. Efforts should bemade to widen anddeepen theprocessof information flowfor the benefit
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andeducation of Indiancustomers. There isa need to educatethe customers on bank products.JM International Journal of Management Research (JMIJMR)41

Advertisement Advertisement is an eminent part of marketing of bank products. Advertisement should be such that appeals to people. It should not follow the orthodox pattern of narrating a product. For effectiveadvertisement, bank should understand peoples tastes and choices.

the online realm that Bank of America will be fighting some of its next important battles, looking for more top positions to claim.

While many banks have strengthened their Internet presence through online banking services, upgraded Web sites and online advertising, the traditional brands have been beaten to the search engine marketing (SEM) punch by newer, more online-savvy financial services firms. According to a February 2006 Bank Technology News article by Glen Fest, Search Engines: Out of Banks Plain View, market leaders frequently have been outperformed by aggressive smaller players,

such as financial portals and operations that specialize in the sub-prime market, especially when it comes to head keywords like mortgage and auto loans. But the tide is turning, and Bank of America is one of those big brands leading the charge. Check out Google or Yahoo! search results today, and you will see names like WaMu, Wachovia, Citibank and, yes, Bank of America in the top echelons of

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the paid and natural search results.

According to the SEM plan Bank of America has in store for 2007 and beyond, the firm intends to stay in this dominant position.

The Customers Are in Revolt! February 2012From Target Marketing In the fall of 2011, if the marketing powers-that-were at Bank of America and Netflix had practiced the Method Marketing concept,

they would not have wound up eating large helpings of crow.

Bank of America flexes its marketing and brand muscle to dominate the search landscape

n the era of globalization each and every sector faced the stiff competition from thei r rivals. And world also converted into the flat from the globe. After the policy of liberalizationand RBI initiatives to take the step for the private sector banks, more and more changes aretaking the part into it. And there are create competition between the private sector banks and public sector bank.Private sector banks are today used the latest technology for the different transaction of day

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today banking life. As we know that Information Technology plays the vital role in t he eachand every industries and gives the optimum return from the limited resources.Banks are service industries and today IT gives the innovative Technology application toBanking industries. BANK OF AMERICA BANK is the leader in the industries and today IT and BANK OF AMERICA BANK together combined they reached the sky. New technology changed the mind of the customersand changed the queue concept from the history banking transaction. Today there aredifferent channels are available for the banking transactions.We can see that the how technology gives the best results in the below diagram. There aredrastically changes seen in the use of Internet

banking, in a year 2001 (2%) and in the year 2008( 25%). These type of technology gives the freedom to retail customers.Centralized Processing UnitsDerived Economies of ScaleElectronic Straig ht Through ProcessingReduced Transaction CostData Warehousing , CRMImprove cost efficiency, Cross sell

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CHAPTER-4

SOURCES OF FINANCE The Long-Term Finance may be Raised by the Companies from the following Sources:Capital Market Capital market denotes an arrangement whereby transactions involving the procurement and supply of long-term funds take place among individuals and various organisations. In the capital market, the companies raise funds by issuing shares and debentures of different types. When long-term capital is initially raised by new companies or by existing companies by issuing additional shares or debentures, the transactions are said to take place in the market for new capital called, as 'New Issue Market'. But, buying and selling of shares and debentures already issued by companies takes place in another type of market called as 'the Stock market'. Special Financial Institutions A large number of financial institutions have been established in India for providing long-term financial assistance to industrial enterprises. There are many all-India institutions like Industrial Finance Corporation of India (IFCI); Industrial Credit and Investment Corporation of India (ICICI); Industrial Development Bank of India(IDBI), etc. At the State level, there are State Financial Corporations (SFCs) and State Industrial Development Corporations (SIDCs). These national and state level institutions are known as 'Development Banks'. Besides the development banks, there are several other institutions called as 'Investment Companies' or 'Investment Trusts' which subscribe to the shares and debentures offered to the public by companies. These include the Life Insurance Corporation of India (LIC); General Insurance Corporation of India (GIC); Unit Trust of India (UTI), etc. Leasing Companies Manufacturing companies can secure long-term funds from leasing companies. For this purpose a lease agreement is made whereby plant, machinery and fixed assets may be purchased by the leasing company and allowed to be used by the manufacturing concern for a specified period on payment of an annual rental. At the end of the period the manufacturing company may have the option of purchasing the asset at a reduced price. The lease rent includes an element of interest besides expenses and profits of the leasing company.
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Foreign Sources Funds can also be collected from foreign sources, which usually consists of: Foreign Collaborators:- If approved by the Government of India, the Indian companies may secure capital from abroad through the subscription of foreign collaborator to their share capital or by way of supply of technical knowledge, patents, drawings and designs of plants or supply of machinery. International Financial Institutions:- like World Bank and International Finance Corporation (IFC) provide long-term funds for the industrial development all over the world. The World Bank grants loans only to the Governments of member countries or private enterprises with guarantee of the concerned Government. IFC was set up to assist the private undertakings without the guarantee of the member countries. It also provides them risk capital. Non-Resident Indians:- persons of Indian origin and nationality living abroad are also permitted to subscribe to the shares and debentures issued by the companies in India.

Retained Profits or Reinvestment of Profits An important source of long-term finance for ongoing profitable companies is the amount of profit which is icici bankumulated as general reserve from year to year. To the extent profits are not distributed as dividend to the shareholders, the retained amount can be reinvested for expansion or diversification of business activities. Retained profit is an internal source of finance. Hence it does not involve any cost of floatation which has to be incurred to raise finance from external sources. RATIO ANALYSIS PERFORMANCE RATIOS Return on average assets Return on average common shareholders equity Return on average tangible common shareholders equity Return on average tangible shareholders equity Total ending equity to total ending assets Total average equity to total average assets

0.26% n/m n/m 4.18 10.41 10.04

0.22% 1.80 4.72 5.19 9.74 8.94

0.94% 11.08 26.19 25.13 8.56 8.53

1.44% 16.27 38.23 37.80 9.27 8.90

1.30% 16.51 31.80 31.67 7.86 7.86

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Dividend payout PER COMMAN SHARE DATA Earnings(loss) Diluted earnings(loss) Dividends paid Book value Tangible book value Market Price Per Share Of Common Stock Closing High Closing Low Closing MARKET CAPITALIZATION AVERAGE BALANCE SHEET Total loans and leases Total assets Total deposits Long term debt Common shareholders equity Total shareholders equity ASSET QUALITY Allowance for credit losses Nonperforming loans, leases Net charges Offs Allowance for loan and leases as a percentage of total loans and leases outstanding Net charges offs as a percentage of average loans and leases outstanding Non performing loans, leases as a percentage of total loans and leases outstanding Nonperforming loans, leases and foreclosed properties Ratio of the allowance for loan and lease losses at December 31 to net charges offs CAPITAL RATIOS(YEAR END) Risk based capital

n/m $(0.29) (0.29) 0.04 21.48 11.94

n/m $0.54 0.54 2.24 27.77 10.11

72.26 $3.32 3.29 2.40 32.09 12.71

45.66 $4.63 4.58 2.12 29.70 13.26

46.61 $4.08 4.02 1.90 25.32 13.51

$15.06 18.59 3.14

$14.08 45.03 11.25

$41.26 54.04 41.10

$53.39 54.90 43.09

$46.15 47.08 41.57

$948,805 2,437,517 980,966 446,634 182,288 244,645 $38,687 35,747 111 4.16%

$910,878 1,843,979 831,144 231,235 141,638 164,831 $23,492 18,212 141 2.49%

$776,154 1,602,073 717,182 169,855 133,555 136,662 $12,106 5,948 207 1.33%

$652,417 1,466,681 672,995 130,124 129,773 130,463 $9,413 1,856 505 1.28%

$537,218 1,269,892 632,432 97,709 99,590 99,861 $8,440 1,603 532 1.40%

3.58% 3.75

1.79% 1.77

0.84% 0.64

0.70% 0.25

0.85% 0.26

3.98 1.10

1.96 1.42

0.68 1.79

0.26 1.99

0.28 1.76

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Tier 1 common Tier 1 Total Tier 1 leverage Tangible equity Tangible common equity

7.81% 10.40 14.66 6.91 6.42 5.57

4.80% 9.15 13.00 6.44 5.11 2.93

4.93% 6.87 11.02 5.04 3.73 3.46

6.82% 8.64 11.88 6.36 4.47 4.27

6.80% 8.25 11.08 5.91 4.36 4.34

BALANCE SHEET ANALYSIS BALANCE SHEET ANALYSIS Selected Balance Sheet Data Dollars in millions ASSETS 2009 Federal funds sold and securities borrowed Trading accounts assets Debt securities Loans and Leases All other assets TOTAL ASSETS LIABILITIES Deposits Federal funds purchased and securities loaned Trading account liabilities Commercial paper and short term borrowings Long term debt All other liabilities TOTAL LIABILITIES $189,933 182,206 311,441 900,128 639,591 $2,223,299 $991,611 255,185 65,432 69,524 438,521 171,582 1,991,855 DECEMBER 31 2008 $82,478 134,315 277,589 931,446 392,115 $1,817,943 $882,997 206,598 51,723 158,056 268,292 73,225 1,640,891 AVERAGE BALANCE 2008 2009 $235,764 217,048 271,048 948,805 392,115 $2,437,517 $980,966 369,863 72,207 118,781 446,634 204,421 2,192,872 $128,053 186,579 250,551 910,878 367,918 $1,843,979 $831,144 272,981 72,915 182,729 231,235 88,144 1,679,148
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SHAREHOLDERS EQUITY sTotal liabilities

231,444 $2,223,299

177,052 $1,817,943

244,645 $2,437,517

164,831 $1,843,979

At December 31, 2009, total assets were $2.2 trillion, an increase of $405.4 billion, or 22 percent, from December 31, 2008. Average total assets in 2009 increased $593.5 billion, or 32 percent, from 2008. The increases in year-end and average total assets were primarily attributable to the acquisition of Merrill Lynch, which impacted virtually all categories, but particularly federal funds sold and securities borrowed or purchased under agreements to resell, trading account assets, and debt securities. Cash and cash equivalents, which are included in all other assets in the table above, increased due to our strengthened liquidity and capital posi-tion. Partially offsetting these increases was a decrease in year-end loans and leases primarily attributable to customer payments, reduced demand and charge-offs.

CHAPTER-5

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Performance analysis of the company

Net income was $6.3 billion in 2009, compared with $4.0 billion in 2008. Including preferred stock dividends and the impact from the repayment of the U.S. governments $45.0 billion preferred stock invest-ment in the Corporation under the Troubled Asset Relief Program (TARP), income applicable to common shareholders was a net loss of $2.2 bil-lion, or $(0.29) per diluted share. Those results compared with 2008 net income applicable to common shareholders of $2.6 billion, or $0.54 per diluted share. Revenue, net of interest expense on a fully taxable-equivalent (FTE) basis, rose to $120.9 billion representing a 63 percent increase from $74.0 billion in 2008 reflecting in part the addition of Merrill Lynch and the full-year impact of Countrywide. Net interest income on a FTE basis increased to $48.4 billion com-pared with $46.6 billion in 2008. The increase was the result of a favor-able rate environment, improved hedge results and the acquisitions of Countrywide and Merrill Lynch, offset in part by lower asset and liability management (ALM) portfolio levels, lower consumer loan balances and an increase in nonperforming loans. The net interest yield narrowed 33 basis points (bps) to 2.65 percent. Noninterest income rose to $72.5 billion compared with $27.4 billion in 2008. Higher trading account profits, equity investment income, investment and brokerage services fees and investment banking income reflected the addition of Merrill Lynch while higher mortgage banking and insurance income reflected the full-year impact of Countrywide. Gains on sales of debt securities increased driven by sales of agency MBS and collateralized mortgage obligations (CMOs). Equity investment income benefited from pre-tax gains of $7.3 billion related to the sale of portions of our investment in China Construction Bank (CCB) and a pre-tax gain of $1.1 billion on our investment in BlackRock, Inc. (BlackRock). In addition, trading account profits benefited from decreased write-downs on legacy assets of $6.5 billion compared to the prior year. The other income (loss) category included a $3.8 billion gain from the contribution of our mer-chant processing business to a joint venture. This was partially offset by a decline in card income of $5.0 billion mainly due to higher credit losses on securitized credit card loans and lower fee income. In addition, non-interest income was negatively impacted by $4.9 billion in net losses mostly related to credit valuation adjustments on the Merrill Lynch struc-tured notes.

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The provision for credit losses was $48.6 billion, an increase of $21.7 billion compared to 2008, reflecting deterioration in the economy and housing markets which drove higher credit costs in both the consumer and commercial portfolios. Higher reserve additions resulted from further deterioration in the purchased impaired consumer portfolios obtained through acquisitions, broad-based deterioration in the core commercial portfolio and the impact of deterioration in the housing mar-kets on the residential mortgage portfolio. Noninterest expense increased to $66.7 billion compared with $41.5 billion in 2008. Personnel costs and other general operating expenses rose due to the addition of Merrill Lynch and the full-year impact of Coun-trywide. Pre-tax merger and restructuring charges rose to $2.7 billion from $935 million a year earlier due to the acquisition of Merrill Lynch. For the year, we recognized a tax benefit of $1.9 billion compared with tax expense of $420 million in 2008. The decrease in tax expense was due to certain tax benefits, as well as a shift in the geographic mix of the Corporations earnings driven by the addition of Merrill Lynch.

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REASON FOR THE CONTRACTION OF BANK OF AMERICA

Some banks have been deemed too big to fail. But could some banks simply be physically too big? That seems to be the case with Bank of America (BAC), which was reported to be planning to shut 10% of its 6100 branches. According to the Wall Street Journal, which broke the story in Tuesday's editions, B of A's customers increasingly are opting for online and mobile banking transactions. Moreover, half of the bank's deposits are being made via automated teller machines, up sharply from just one-third six months earlier. But veteran banking analyst Dick Bove of Rochdale Securities disputes that a shrinkage in B of A's vast branch network would be driven by technology. Economics will be the main factor reining in the ubiquitous red-and-blue branches, he says. Whatever the motivation, America's big banks are apt to learn the lesson being absorbed

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by Starbucks (SBUX) -- you can reach the point of diminishing returns from expansion. And once the culling begins, the resulting vacancies in these prime retail spaces can only worsen the downward spiral in commercial real estate as well as employment in banking. Only now, well into the 21st century, has electronic banking become the norm for retail bank customers. But Bove avers that they had shown a distinct preference for oldfashioned bricks-and-mortar branches. Opening more branches expanded deposits, which earlier in the decade could be deployed profitably owing to low deposit rates and robust mortgage lending at a generous, five-percentage-point spread. Now, Bove continues, the situation is reversed. B of A has too many deposits (12.2% of the nation's total, boosted by the acquisition of Countrywide Financial), and he says the bank doesn't really want to make loans. At the same time, the yields on its assets are falling faster than deposit rates, which can't drop much further.

ORGANISATIONAL LEADERSHIP

BANK OF AMERICA FOLLOWS STRONG LEADRSHIP

Collins (2001) provides examples of banking deregulation and the effects at Wells Fargo and Bank of America. Wells Fargo employed strong generals. These were executives that argued eyeball to eyeball. Bank of America chose to retain weak generals and strong lieutenants. The concept was good, but the implementation disastrous. The idea was to keep competing strong voices from walking out the door

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and ending up with one dominant party. In fact, weak generals waited for direction fromabove, taking no action without it. Perhaps the implementation was wrong. The idea is to rely on strong lieutenants who could provide insight from the frontlines. Ideally, the best information that executives need to hear is from the bottom of the organizational chart. In the bank example, Bank of America suffered lasting harm and ended up hiring strong generals from Wells Fargo.

MARKET SHARE The 15 largest U.S. Banks based on total domestic deposits: Rank 1 2 3 4 5 6 7 8 9 10 Bank Bank of America Wells Fargo Chase Citi PNC U.S. Bank Suntrust Capital One BB&T Regions Total Deposits (In Billions) $916.11 $750.45 $652.69 $310.47 $177.35 $169.20 $118.81 $116.50 $104.58 $95.79 Market Share 12% 10% 9% 4% 2% 2% 2% 2% 1% 1% Cum Market Share 12% 22% 30% 34% 37% 39% 40% 42% 43% 45%

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11 12 13 14 15

Fifth Third Bank BNY Mellon Key Bank Morgan Stanley Zions Bank

$78.84 $76.27 $61.83 $55.18 $40.37

1% 1% 1% 1% 1%

46% 47% 47% 48% 49%

TOTAL DOMESTIC DEPOSITS:

$7,661.00

The above table only includes banks chartered in the U.S. (Source: FDIC, June 30, 2010)

SWOT ANALYSIS OF BANK OF AMERICA CONTINUUM SOLUTIONS PVT LTD

STRENGHTS Successful acquisitions: the acquisition and relatively painless integration of MERYLL LYNCH had a positive impact on BACS growth, ensuring it remains the fastest growing company in the industry, averaging growth of around 15% a year compared with 10% for itsclosest competitor - HBOS. BACS has the ability to integrate acquisitions with a relative lack of disruption and it is a great advantage for the group. Brand strategy: as opposed to some of its competitors (e.g. HSBC), BANK OF AMERICA (BACS) operates a multi-brand strategy. The company operates under numerous well-known brand names, which allows the company to appeal to many different segments of the market.

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Distribution channel strategy: BACS is continuously improving the distribution of its products. Its online and Internet-based access offers a combination of excellent growth prospects and its retail direct business also saw growth of 27% in 2002 and 15% in 2003. Another example is Tesco Personal Finance, the UK's most successful supermarket bank, with over four million customer accounts. Various sources of income: BACS has many sources of income throughout the group, and this diversity within the group makes the company more flexible and resistant to economic and environmental changes.

WEAKNESSES Potential problems with acquisitions: BACS has been successful in its integration of acquisitions such as NatWest, however these transactions also have negative aspects. New costs associated with integration and management systems can leave the group more vulnerable to shifts in the market and the economy.

OPPORTUNITIES Emerging markets: since there is more investment demand in the United States, Japan and the rest of Asia, BACS should concentrate on these markets, especially in view of low global interest rates.Central and Eastern European new EU members: growth is picking up with exports and private consumption. Also, because of their size, the new EU member states are a profitable investment target.

Focus on improvements in European and U.S. operations: BACS has increased its European operations with the purchase of the European motor insurance business of All State Corporation, which gave it access to the German and Italian markets. It also strengthened its U.S. operations through the acquisition of the regional retail and commercial banking operations of Pennsylvania-based Mellon Financial Corporation. Further acquisitions are planned in the near future to achieve further aggressive growth in these markets.

THREATS The only threat which the BACS faces as of now is form its other competitors

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Rise in inflation figures which would lead to increase in interest rates. Peoples faith in public sector banks.

CHAPTER-6

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FINDINGS AND ANALYSIS

Net income was $6.3 billion in 2009, compared with $4.0 billion in 2008. Including preferred stock dividends and the impact from the repayment of the U.S. governments $45.0 billion preferred stock invest-ment in the Corporation under the Troubled Asset Relief Program (TARP), income applicable to common shareholders was a net loss of $2.2 bil-lion, or $(0.29) per diluted share. Those results compared with 2008 net income applicable to common shareholders of $2.6 billion, or $0.54 per diluted share. Revenue, net of interest expense on a fully taxable-equivalent (FTE) basis, rose to $120.9 billion representing a 63 percent increase from $74.0 billion in 2008 reflecting in part the addition of Merrill Lynch and the full-year impact of Countrywide. Net interest income on a FTE basis increased to $48.4 billion com-pared with $46.6 billion in 2008. The increase was the result of a favor-able rate environment, improved hedge results and the acquisitions of Countrywide and Merrill Lynch, offset in part by lower asset and liability management (ALM) portfolio levels, lower consumer loan balances and an increase in nonperforming loans. The net interest yield narrowed 33 basis points (bps) to 2.65 percent. Noninterest income rose to $72.5 billion compared with $27.4 billion in 2008. Higher trading account profits, equity investment income, investment and brokerage services fees and investment banking income reflected the addition of Merrill Lynch while higher mortgage banking and insurance income reflected the full-year impact of Countrywide. Gains on sales of debt securities increased driven by sales of agency MBS and collateralized mortgage obligations (CMOs). Equity investment income benefited from pre-tax gains of $7.3 billion related to the sale of portions of our investment in China Construction Bank (CCB) and a pre-tax gain of $1.1 billion on our investment in BlackRock, Inc. (BlackRock). In addition, trading account profits benefited from
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decreased write-downs on legacy assets of $6.5 billion compared to the prior year. The other income (loss) category included a $3.8 billion gain from the contribution of our mer-chant processing business to a joint venture. This was partially offset by a decline in card income of $5.0 billion mainly due to higher credit losses on securitized credit card loans and lower fee income. In addition, non-interest income was negatively impacted by $4.9 billion in net losses mostly related to credit valuation adjustments on the Merrill Lynch struc-tured notes. The provision for credit losses was $48.6 billion, an increase of $21.7 billion compared to 2008, reflecting deterioration in the economy and housing markets which drove higher credit costs in both the consumer and commercial portfolios. Higher reserve additions resulted from further deterioration in the purchased impaired consumer portfolios obtained through acquisitions, broad-based deterioration in the core commercial portfolio and the impact of deterioration in the housing mar-kets on the residential mortgage portfolio. Noninterest expense increased to $66.7 billion compared with $41.5 billion in 2008. Personnel costs and other general operating expenses rose due to the addition of Merrill Lynch and the full-year impact of Coun-trywide. Pre-tax merger and restructuring charges rose to $2.7 billion from $935 million a year earlier due to the acquisition of Merrill Lynch. For the year, we recognized a tax benefit of $1.9 billion compared with tax expense of $420 million in 2008. The decrease in tax expense was due to certain tax benefits, as well as a shift in the geographic mix of the Corporations earnings driven by the addition of Merrill Lynch.

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CONCLUSION

Keeping pace with changing times and an ever-growing need for specialized Services, BANK OF AMERICA BANK has begun offering its marketing expertise and distributaries facilities to other producers in cement and related areas. However a precondition of all such agreement is quality control supervision to be carried out by an BANK OF AMERICA BANK expert located at the franchisees plant. Each of the regional Marketing offices has a customer services cell that is managed by qualified civil engineers. These, in addition to handling after-sales servicing, function as advisory bodies that can help customers, make the right choice of cement for a specific area of application. BANK OF AMERICA BANK can provide expert advice on getting the best value from cement and offer assistance on related issues in civil construction projects. Besides this, technical books/booklets on cement, concrete and building Construction and maintenance are regularly must be available for the benefit of the customers. In addition to this, BANK OF AMERICA BANK also publish free booklet, which profiles the Latest information on concrete research, design, construction and maintenance. Thus to conclude it can be said that BANK OF AMERICA bank cement has its branches spread all over India BANK OF AMERICA BANK Limited company product are the profitable not only in India but also in the Whole world RECCOMENDATION

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The more there is cards funding the more tha bank faces the chances of losing its revenue The accounting standards really differ as compared to INDIA so it needs to work on that The merger with MEYLL LYNCH no doubt has increased its revenue but the profitability is not as much as expected so needs to get more sevices involved

BIBLIOGRAPHY

INTERNET

www.bankofamerica.com FLAGSCAPE OF BANK OF AMERICA www.wikipedia.org

BOOKS Journals of BANK OF AMERICA CONTINUUM SOLUTIONS PVT LTD. Pamphlets of BANK OF AMERICA CONTINUUM SOLUTIONS PVT LTD.

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