Bank of America 2000 Annual Report Download - page 15

13
But the largest and fastest grow-
ing group of relationship customers
are those we call Plus. These indi-
viduals qualify for enhanced service
simply because of the volume of busi-
ness they bring to the bank, not by
income level or any other demo-
graphic measure. Almost anyone can
qualify by simply maintaining an
account such as Advantage or the
Money Manager Account, which
combine investment and banking,
or by combining a checking account
with a home loan. We are able to
provide an attractive value package
to Plus customers because we receive
considerable value in return. The rate
of customer retention increases
12% when customers move to Plus.
Deposit, investment and credit bal-
ances all tend to grow rapidly. And
the net income we derive from the
relationship increases significantly.
Imagine how revenue and prof-
its would grow if the millions of
customers who qualify for Plus or
Premier service, or for the Private
Bank, would sign up for one of
those service levels.
And we have additional oppor-
tunities to grow our revenue, simply
by doing more for our customers
who already enjoy relationship serv-
ice. For example, Plus customers
average 10 financial relationships
per household, although typically
only four of those are with Bank of
America. They have nearly three times
the appetite for credit as the general
population, and they save and invest
at five times the average rate. Yet they
take much of their credit and invest-
ment business to other financial insti-
tutions, most of which we believe
cannot match our convenience or
provide the broad complement of
financial services we can.
Two of our biggest growth
engines, Asset Management and
Card and Payment Services, also
have tremendous potential for
advancing our relationship strategy
(see pages 14-15).
Another area with strong rela-
tionship potential is consumer real
estate, where we have made huge
strides in improving our quality of
service. As the nation’s largest ser-
vicer and third-largest originator of
home mortgages, Bank of America
helps more than 400,000 families
fulfill their dreams of home owner-
ship each year. This is a business in
which razor-thin margins and heavy
competition make it essential to main-
tain a low-cost, high-quality environ-
ment. By redesigning the application,
approval and delivery process for
telephone lending, we have shaved
several days off the time it takes us
to move from a loan application to
a booking, increased our mortgage
approval rate by 15% and raised our
booking rate nearly 30%.
We view our nationwide con-
sumer franchise as the envy of the
industry and the most convenient
for customers. The states in which
Bank of America offers full-service
banking account for 80% of the
nation’s projected population growth
over the next five years, and we have
the leading market share in the four
fastest growing states.
Achieving our growth goals is
easier said than done. But we know
we can succeed because we are
already doing it in some key busi-
nesses, such as Asset Management
and Card and Payment Services and
in some markets. In California, our
largest market by far, we grew rev-
enues 8% in 2000. Deposits grew
7.4% and consumer assets grew more
than 12%. Those growth rates are
significantly higher than the year
before. We intend to continue to
improve the integration of our prod-
ucts and services across all delivery
channels with the goal of getting
the rest of the consumer franchise
to perform at least at that level.
When we do that, we will have
transformed Bank of America into a
truly great growth company.
Janet Hill of Danville, California, is a
savvy investor whose portfolio repre-
sents a significant portion of her income.
Actively involved in her family’s finan-
cial decision-making since her two
daughters were young, she and her
husband took many investment
courses over the years and belonged
to an investment club.
Widowed four years ago, Hill
looked for an investment counselor
who respected her experience and
input. She found the person she was
looking for at Bank of America. “We
talk regularly – either he calls me or I
call him – and we meet three or four
times a year,” she said. Hill’s relation-
ship with the bank also includes check-
ing and savings accounts, credit cards
and an IRA. A volunteer for the Red
Cross and programs for disadvantaged
children, she and her daughter recently
bought a horse, and she intends to
take riding lessons. Confident her
portfolio is in capable hands, Hill
makes the most of her very full life.