Bank of America 2014 Annual Report Download - page 3

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As we discuss 2014, we will focus on how we improved our
company for all of our customers and clients, and for you,
our shareholders.
Serving America’s families
Our first group of customers is people. We serve millions
of individuals and families through our Retail, Preferred,
Merrill Lynch Wealth Management and U.S. Trust, Bank of
America Private Wealth Management lines of business. Together,
these businesses produced revenue of $48 billion in 2014,
about 57 percent of our total, and net income of $10 billion.
2014 was a year of continuing to transform how we serve
Retail and Preferred customers in the U.S. For instance, we are
adapting to the mobile revolution and increasing our sales force,
especially in our financial centers. Overall, we are offering more
opportunities to help these consumers transact, borrow and save.
Our consumer business is the best in the industry. Each week,
customers interact with us more than 130 million times. The
key to our success is serving each customer well, while making
all of our capabilities available to them. We will keep simplifying
our operations and reducing costs so we can provide the most
effective, fair and rewarding products for these customers.
We continue to invest in our mobile banking capabilities. As of
February 2015, we have nearly 17 million active mobile banking
consumer and small business customers. Each day, another 5,000
to 7,000 customers join our mobile banking platform. Each week,
mobile customers send more than $3 billion in payments from
their phones. And last year, more than 11 percent of all consumer
checks we processed were deposited through mobile devices.
We also introduced Apple Pay™ to our customers in October to
make payments easier and safer through tokenization, and more
than 1 million customers have already signed up in just six months.
We will continue to develop ways to help our mobile customers
make secure, convenient payments.
Our mobile customers are joined by about 31 million others who
bank online via their computers. Each day, millions of customers log
on at increasing rates to pay bills online, borrow through our direct
online loan portal and invest through our Merrill Edge™ platform.
Last year, Merrill Edge brokerage assets grew 18 percent,
and the platform continues to grow quickly for investors who
are building their savings or want to play a more direct role.
We see this business as a strong complement to our two wealth
management businesses — Merrill Lynch and U.S. Trust.
We also launched our Preferred Rewards program in 2014. Simply
put, the more business a customer does with us, the more value we
can provide them. This has been very successful in terms of assets
gathered, but also in terms of improved customer satisfaction.
At the same time, we continue to simplify our consumer business.
This includes fewer but better offerings; overdra policies and
products that are fair and helpful to our customers; and our
own improvements in efficiency. Last year, we reduced our
consumer operating costs to a new low of less than 2 percent of
total deposits, compared with about 3 percent a few years ago.
Alongside the simplification work, we are investing in additional
sales capacity to make it easier for our customers to interact
with us and ensure we’re making all of our capabilities readily
available. We’ve added thousands of sales specialists over the
past several years and invested in new technologies, including
tablet technology, to help them serve our customers. We’ve also
invested in new retirement and financial planning capabilities
and additional ATMs with Teller Assist. All of this allows for
better service and more automation.
We are expanding our Retail and Preferred businesses to
markets we haven’t served, principally because a predecessor
institution did not serve them. We opened our first financial
center in Denver in 2014, and we are opening one in Minneapolis
soon. We had a well-established presence in those markets
already, serving clients in our other businesses (Merrill Lynch,
U.S. Trust, Business Banking, Global Commercial Banking, and
Global Corporate and Investment Banking), as well as retail
customers with a mortgage or credit card, for many years.
Having financial centers in these markets lets us better serve
our customers and clients from well-integrated, modern
branches equipped with the best technology and a well-trained
sales force.
Merrill Lynch and U.S. Trust, our Global Wealth and Investment
Management businesses, had another strong year. In 2014, the
team produced record revenue of $18.4 billion and net income
of $3 billion with strong margins. Client satisfaction continues to
improve and advisor attrition remains very low. Together, these
businesses have $2.5 trillion in customer assets, up 6 percent
from the prior year. We had record asset management fees,
strong client and market flows, and increased loan balances.
These businesses continue to both provide and derive value
through their affiliation with our broader company.
We see examples of this everywhere. For instance, about
40 percent of new household clients that Merrill Lynch gained this
year came as referrals from our other business lines. This shows
the power of connecting our businesses. And we’re just beginning.
Serving businesses, from the smallest
to the world’s largest companies
Moving to the businesses that serve companies of all sizes, we
see continued progress. We serve these clients through three
lines of business: Business Banking, Global Commercial Banking,
and Global Corporate and Investment Banking. Business Banking
clients are smaller companies operating primarily in the U.S.,
while clients in Global Commercial Banking operate in the
U.S. and globally (more on that below). Global Corporate and
Investment Banking clients are companies we serve globally.
Together, these businesses, reported as Global Banking in our
segment reporting, accounted for about $17 billion in revenue,
nearly 20 percent of our total, and $5.4 billion in net income.
A word about how these clients are changing. In general, a
significantly higher number of companies we serve are operating
globally than in previous times. While Global Corporate and
Investment Banking clients have been active around the world
for many years, we are seeing more of our U.S. middle-market
clients in our Global Commercial Banking business doing so.
We’re even seeing global activity among the smaller companies
our Business Banking teams support.
Some of these companies are looking to access capabilities
and resources outside the U.S. Others are establishing
manufacturing facilities nearer to the countries where they
are selling their products, reducing the cost of delivery of