Bank of America 2000 Annual Report Download - page 16

Asset Management
The Asset Management Group serves the
investing needs of all clients, with a wide
range of world-class investment products and
services. It’s a rapidly growing business for
us, as we add customers who have tradition-
ally looked elsewhere when thinking about
investing their assets.
Asset Management revenue, adjusted for
divestitures, is currently growing at an annual
rate of about 12%, while net income is grow-
ing at about a 40% annual rate. With results
like that, we want to grow the Asset Management
business so that it contributes more than the
current 7.6% of total company earnings. We
have an excellent opportunity to do that, as the
financial needs of individual and institutional
clients, including significant demand for
investment products, have become increas-
ingly complex. In addition, high-net-worth
households are among the fastest growing
segments in the country.
To capitalize on that growth potential,
we are increasing our investment in the Asset
Management business, beginning with the
Private Bank. A leader in providing innovative,
customized investment management, trust,
financial and estate planning and credit prod-
ucts to the high-net-worth market, the Private
Bank has a physical presence in most of the
wealthiest areas of the United States. We are
adding offices in high-potential California mar-
kets, going into Massachusetts and Connecticut
and expanding the New York office.
We will add more professionals across
the country to provide advisory services, tax
strategies and investing and wealth transfer
expertise. Access to products will expand to
include derivatives, private equity placements
and other alternative investments. Our com-
pany’s ongoing investment in e-commerce
will provide clients with both information
and advice through online, real-time access
to their entire Bank of America relationship.
In particular, we expect strong growth in
our investment management business, Banc
of America Capital Management (BACAP),
which focuses on developing and managing
products for retail investors, high-net-worth
clients and institutions with both cash manage-
ment and long-term asset management needs.
At present, BACAP manages $277 billion in
assets for individuals and institutions and pro-
vides advisory services to the $107 billion
Nations Funds family of mutual funds. We
plan to double our equity research coverage
and continue to expand our investment man-
agement discipline in a number of ways,
including the completion of our acquisition of
Marsico Capital Management early in 2001.
We also plan to increase our sales force
to serve the investing needs of our diverse
institutional client base as well as expand our
product array to offer retirement programs to
small business and middle market clients.
And to better serve retail investors seeking
advice and solutions, we will add sales per-
sonnel to work with investment professionals
in our Private Bank, retail brokerage affiliate
and external broker-dealers.
Our retail brokerage affiliate, Banc of
America Investment Services, Inc., is a criti-
cal channel through which we meet a wide
array of investing needs. One key to our suc-
cess has been the spectacular growth of the
Money Manager Account, which combines
investments and banking. Balances have
increased 65% to more than $20 billion
within the past year. We expect to continue
growing that customer base as we pursue our
relationship banking strategy.
To enhance customer awareness of our
investment capabilities, we expect to expand
the number of investment sales officers in
banking centers to more than 3,500 by year
end 2001, up from 2,500. We also plan to
continue to grow our team of full-service
investment consultants by 25% per year over
the next three years. We are enhancing our
product array, as well, to include financial
planning capabilities that enable us to pro-
vide a broad spectrum of advice to clients.
Cash
Equity
Other
$8.3
Fixed Income
$277 Billion of Assets Under Management
($ in billions)
$110.8
$113.6
$44.3
14
As we continue to grow our asset
management business, includ-
ing the Private Bank, into the
nation’s premier provider of
investment products and serv-
ices, we reach signposts along
the way that tell us we are suc-
ceeding in our efforts to pro-
vide value for large numbers of
customers and clients. Some
recent achievements include:
At midyear 2000, Bank of
America ranked first in mutual
funds and annuities sales among
a nationwide list of 100 holding
companies, banks and savings
and loans. We were also one of
the fastest growing, with sales
more than doubling over the first
six months of the previous year.
Assets under management
have grown by more than 30%
in the last three years to
$277 billion.
In addition, the Bank of
America Private Bank is the
world’s largest corporate
trustee for individuals, with
$129 billion in trust assets
under management and
approximately 82,000 trust
accounts on our books.