Bank of America 2008 Annual Report Download - page 4
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Our size, scale, revenue diversity and ability
to execute are never more crucial than during
a year of extraordinary challenges.
To Our Shareholders
2008 was an extraordinarily difficult
year for our company.
The economy, which had struggled
for most of the year, hit a wall in the
fourth quarter, posting the largest quar-
terly decline in gross domestic product
since 1982. Credit costs, which had
been rising steadily all year, escalated
as unemployment and underemploy-
ment rose sharply. We expect credit
costs to continue to rise this year.
Trading results took a sharp turn for
the worse as credit spreads suddenly
widened in the fourth quarter. Trends
in the credit markets are difficult to
predict, but we are hopeful that a
move toward normalcy will allow our
capital markets operations to return
to profitability in 2009.
These developments resulted in our
first quarterly loss since 1991, and a
sharp drop in our profitability for the year.
In view of the challenging environ-
ment, we took a number of difficult
steps: We cut our dividend — which
had increased every year since
1977 — to $0.01. To lower our
expense base, we accelerated and
expanded our cost-cutting initiatives.
The board accepted my recommenda-
tion that no members of our Executive
Management Team should receive
any bonus or incentive compensation
for 2008. And, to help us close our
acquisition of Merrill Lynch, we
2 Bank of America 2008
Chairman’s Letter
Kenneth D. Lewis
CHAIRMAN, CHIEF EXECUTIVE
OFFICER AND PRESIDENT
Chairman’s Letter