Bank of America
The US is home to some of the world’s most powerful and profitable banks, but the one US bank that won the attention of the judges is Bank of America. Its excellent performance in a difficult economic climate and its expansion in the fast-developing Mexican market impressed the judges.
Despite an environment characterised by tumbling financial markets and a sluggish US economy, Bank of America had a banner year in 2002. Its net profit rose 36% and its ROE improved to 19.4% from 13.9% in 2001. Its cost-to-income ratio, meanwhile, declined to 52.55% from 59.2%.
While the bank is doing well domestically, it has demonstrated vision by forming an alliance with Banco Santander’s Mexican subsidiary, Grupo Financiero Santander Serfin. To cement the alliance, Bank of America acquired a 24.9% stake in the group for $1.6bn in cash.
The bank has also cleverly taken advantage of historically-low US interest rates by rolling out a fast and efficient mortgage loan facility. Since its introduction in 2002, it has funded $23.8bn worth of mortgage loans.
Chairman and CEO of Bank of America Kenneth D Lewis said: “Our success at Bank of America depends on the combination of our people, our business mix and a commitment to higher standards. We have deliberately focused on attracting and developing talented people who work hard and work smart to produce results. In addition, our business mix, which combines steady earnings growth from our retail business with higher potential growth from our market-sensitive businesses, produces consistent results throughout the economic cycle. Our commitment to achieving higher standards of performance through process and service excellence is raising customer satisfaction and loyalty.”
