Bank of America 2014 Annual Report Download - page 5

3
$223
$237
$261
2012
2013
2014 $6.3
$5.5
$6.4
2014
2013
2012
A final thought on Global Markets. Some years ago we decided
to report the results each quarter in Global Markets as its
own segment. We did this because we knew as we limited its
size and scope relative to the rest of our company, investors
in our company need to see that it remains a stable and
solid performer even aer applying the post-crisis rules and
regulations to our operations. Reporting Global Markets
results separately also helps to highlight the seasonality and
market-related changes in earnings that can affect this business
from quarter to quarter. As we reduced the scope of activity
in this business and aligned the business more closely to our
client activities, we also brought our operating costs to a
fundamentally lower level. This helps us to achieve acceptable
returns in the business even at lower revenue levels.
Finally, isolating the results in the Global Markets business
allows shareholders a clearer perspective on the steady, consistent
nature of the returns we see in our wealth management and
commercial or corporate banking businesses, which derive
synergies from the capabilities in Global Markets as described
above, quite apart from the volatility in the sales and trading
businesses in Global Markets.
A strong company making steady progress
In addition to the increased customer and client activity we are
seeing in all eight of our lines of business, we continue to focus
on the fundamentals.
Balance sheet — We strengthened an already strong and
liquid balance sheet in 2014, ending the year with record capital
and liquidity levels. Last year we increased our common stock
dividend for the first time since 2007 and on March 11 we
announced plans to return additional capital to our shareholders.
Expenses — We completed the industry’s largest cost-savings
program, achieving $8 billion of annualized savings. We continued
to reduce expenses in our mortgage servicing unit. Noninterest
expense, excluding litigation, declined $4.4 billion last year to
$59 billion. We know we have more work ahead.
Credit quality — Credit costs ended the year at a decade-low
level. Net charge-offs declined 44 percent to $4.4 billion, and the
provision for credit losses declined 36 percent to $2.3 billion.
We have achieved this through high-quality underwriting.
As you review this annual report, I’d like to leave you with a few
final thoughts. We have built a company with leading market
positions across every core customer segment served by our
eight lines of business. We built disciplined processes to ensure we
are connecting our customers and clients with all the things we
can do to help them live their financial lives — getting more from
the whole than is achievable from the parts. And we are mindful
of managing our expenses tightly to create the operating
leverage we need to keep investing in our businesses, and to
return excess capital to shareholders over time. Finally, through
such innovations as green bonds, social impact investing
products and SafeBalance Banking®, which helps customers
avoid overdraing, we are guided by the principles of simplicity,
transparency and fairness in our business practices. This focus
on business-driven corporate social responsibility helps to
maintain the trust of our communities and customers.
Delivering responsible growth
With this progress, we are well positioned to continue
building our responsible growth platform into 2015 and
beyond. Responsible growth has several key tenets based
on the premise that we know we must continue to win in
the market. By meeting the core financial services needs of
our customers and clients, we will ensure that our growth is
customer-driven and is connecting them to the real economy
in the markets where we operate. Responsible growth also
means that we must continue to operate within the appropriate
risk parameters. And, finally, responsible growth must come
from activities that are sustainable, meaning we have built
the scale and the processes to ensure operational excellence
and continued innovation in how we deliver services to our
customers and clients.
Before closing, I would like to note the retirement from our
board of Chad Holliday. Chad joined our board in 2009 and
became chairman in 2010. He guided the board during a
transformation of our company. I thank him for his service
and dedication to our company.
On behalf of my more than 220,000 teammates here at
Bank of America, thank you for your investment in our
company. I look forward to reporting our progress to you
throughout the year.
Thank you,
Brian T. Moynihan
Chairman and Chief Executive Officer
March 11, 2015
Average Global Banking deposits ($B) Corporatewide investment banking fees ($B)
(Including self-led deals)