Bank of America 2004 Annual Report Download - page 46

BANK OF AMERICA 2004 45
Consumer Deposit Products
Consumer Deposit Products provides a comprehensive range of deposit
products to consumers and small businesses. Our deposit products
include traditional savings accounts, money market savings accounts,
CDs and IRAs, regular and interest checking accounts, and a variety of
business checking options. These products are further segmented to
address customer specific needs and our multicultural strategy.
We added approximately 2.1 million net new checking accounts
and 2.6 million net new savings accounts during 2004. This growth
resulted from continued improvement in sales and service results in
the Banking Center Channel, improved cross-sale ratios, the intro-
duction of new products, advancement of our multicultural strategy,
and access to the former FleetBoston franchise, where we opened
174,000 net new checking and 193,000 net new savings accounts
since April 1, 2004. Account growth has occurred through productivity
improvements in existing stores, as well as new store openings,
which totaled 167 in 2004.
We generate revenue on deposit products through the results of
a funds transfer pricing process that matches assets and liabilities
with similar interest rate sensitivity and maturity characteristics, fees
generated on our accounts, and interchange income from our debit
cards. Our deposit-taking activities are integrally linked to our liquid-
ity management and ALM interest rate risk management processes.
We seek to optimize the value of deposits through both our client-fac-
ing asset generation and our ALM investment process. The following
table presents the components of Total Revenue for Consumer
Deposit Products.
Consumer Deposit Products Revenue
(Dollars in millions) 2004 2003
Net interest income $ 7,735 $ 5,647
Deposit service charges 4,496 3,577
Debit card income 1,232 896
Total noninterest income 5,728 4,473
Total deposit revenue(1) $ 13,463 $ 10,120
(1) Deposit revenue outside of Global Consumer and Small Business Banking was $985 and $666,
respectively, for 2004 and 2003.
Deposit revenue grew $3.3 billion, or 33 percent. Driving this
growth was the addition of FleetBoston, which contributed $2.1 bil-
lion of deposit revenue.
Net Interest Income increased $2.1 billion, or 37 percent. The
primary driver of the increase was the $80.3 billion, or 35 percent,
increase in average Deposits. Of this growth, $63.0 billion was related
to the addition of FleetBoston customers through the Merger. The addi-
tion of FleetBoston contributed $1.5 billion to Net Interest Income.
Deposit service charges increased $919 million, or 26 percent,
due to the $515 million impact of the addition of FleetBoston, and
the growth of new accounts across our franchise.
Debit card income increased $336 million, or 38 percent. Driving
the increase was growth in transaction activity, evidenced by a 40 percent
increase in purchase volumes, partially offset by the negative impact of
a lower interchange rate on signature debit card transactions. The impact
of the addition of FleetBoston to debit card income was $134 million.
Global Business and Financial Services
This segment provides financial solutions to our clients throughout all
stages of their financial cycles. Our strategy is to bring the capabili-
ties of a global financial services organization to the local level. We
serve our clients through a variety of businesses including Global
Treasury Services, Middle Market Banking, Commercial Real Estate
Banking, Leasing, Business Capital and Dealer Financial Services.
Beginning in 2005, Global Business and Financial Services will include
Latin America. See page 49 for more information on Latin America.
Also beginning in 2005, Global Business and Financial Services will
include Business Banking, which serves our client-managed small
business customers.
Global Treasury Services provides integrated working capital
management and treasury solutions to clients across the U.S. and
37 countries. Our clients include multi-nationals, middle market com-
panies, correspondent banks, commercial real estate firms and gov-
ernments. Our services include treasury management, trade finance,
foreign exchange, short-term credit facilities and short-term investing.
The revenues and operating results where customers and clients are
serviced are reflected in this segment, as well as Global Consumer
and Small Business Banking, and Global Capital Markets and
Investment Banking.
Middle Market Banking provides commercial lending, treasury
management products and investment banking services to middle-
market companies across the U.S.
Commercial Real Estate Banking, with offices in more than 60
cities across the U.S., provides project financing and treasury man-
agement to private developers, homebuilders and commercial real
estate firms. Commercial Real Estate Banking also includes commu-
nity development banking, which provides lending and investing serv-
ices to low- and moderate-income communities.
Leasing provides leasing solutions to small business, middle-
market and large corporations in the U.S. and internationally, offer-
ing expertise in the municipal, corporate aircraft, healthcare and
vendor markets.
Business Capital provides asset-based lending financing solu-
tions customized to meet clients' capital needs by leveraging their
assets on a secured basis in the U.S., Canada and European markets.
Dealer Financial Services provides lending and investing serv-
ices, including floor plan programs for marine, recreational vehicle and
auto dealerships to more than 10,000 dealer clients across the U.S.