Bank of America 1998 Annual Report Download - page 5

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These forces have led to a mass consolidation in the industry between banks and
other financial services firms.
I have argued in the past that we were in an end-game that would leave a
handful of large banks as players on the national stage. I would now argue that
the merger between NationsBank and BankAmerica was, for those organizations,
the culmination of an aggressive growth strategy that had as its rationale the
end-game of consolidation. Customer demands for greater convenience and
broader product offerings created a need for the kind of company we’ve built.
With this merger, however, we have reached the watershed. We must now
turn our attention to an even greater task.
Your company now has more retail and commercial customers in the U.S.
than any other bank. Our geographic reach is unparalleled. We offer a multitude
of financial products and services, and we can provide those products and services
through every existing delivery channel on the market. Our task is to put these
pieces of our business together in a way that creates value for our clients and
customers — value no other bank has ever offered. Technology, of course, is
helping us do this.
Technology is enabling us to create a bank that is available to customers
24 hours a day every day of the year from any telephone or computer terminal in
the world. Technology is enabling us to build connectivity and seamlessness for
customers across product lines and company divisions.
But at the end of the day, it’s not all about technology. It’s about putting
the best people in our markets and giving them the best technology so they can go
out and build the best bank in America.
What will that bank look like? In sum, it will be a nationwide bank
with a strong position in all the country’s best growth markets and the most com-
prehensive corporate client base in the industry. It will have the power and reach
to serve these corporate clients anywhere in the world. It will have the scale and
the capital power to invest in systems and products that will make banking easier
and better for all its customers. And it will be a valued financial partner to indi-
viduals, small business and large corporations, creating broad, deep relationships
over customers’ lifetimes.
This is the bank we’re building.
Financial challenges. While the news of our merger generated great
optimism, financial results for the year were disappointing, largely due to
unforeseen turmoil in international markets during late summer and early fall.
Profits also were hurt by the lending relationship with D.E. Shaw, a trading and
1998 Letter to Shareholders
95
96
97
98
1.04
1.20
1.37
1.59
Dividends
( Per share)
95
96
97
98
15.5
17.0
15.9
14.5
Return on equity (operating basis)
( Percent)
“Our task is to put these pieces of our business
together in a way that creates value for our
clients and customers.”