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http://media.corporate-ir.net/media_files/irol/71/71595/InvestorConference2007/GlobalConsumerSmallBusinessBanking.pdf

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  1. 1. Global Consumer & Small Business Banking Liam McGee President Global Consumer & Small Business Banking
  2. 2. Forward Looking Statements This presentation contains forward-looking statements, including statements about the financial conditions, results of operations and earnings outlook of Bank of America Corporation. The forward- looking statements involve certain risks and uncertainties. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include, among others, the following: 1) projected business increases following process changes and other investments are lower than expected; 2) competitive pressure among financial services companies increases significantly; 3) general economic conditions are less favorable than expected; 4) political conditions including the threat of future terrorist activity and related actions by the United States abroad may adversely affect the company’s businesses and economic conditions as a whole; 5) changes in the interest rate environment reduce interest margins and impact funding sources; 6) changes in foreign exchange rates increases exposure; 7) changes in market rates and prices may adversely impact the value of financial products; 8) legislation or regulatory environments, requirements or changes adversely affect the businesses in which the company is engaged; 9) changes in accounting standards, rules or interpretations, 10) litigation liabilities, including costs, expenses, settlements and judgments, may adversely affect the company or its businesses; 11) mergers and acquisitions and their integration into the company; and 12) decisions to downsize, sell or close units or otherwise change the business mix of any of the company. For further information regarding Bank of America Corporation, please read the Bank of America reports filed with the SEC and available at www.sec.gov. 2
  3. 3. Competitive Differentiators • Our size & scale matter • We have a proven track record of growth • We will continue to grow 3
  4. 4. Our Size & Scale Matter
  5. 5. Our Size & Scale Matter We are Where Customers are In our footprint… • 76% of U.S. population • 75% of small businesses • 93% of Hispanic households • 86% of Asians • 77% of African-Americans
  6. 6. Our Size & Scale Matter We are Where Customers are In our footprint… • 76% of U.S. population Through… • 75% of small businesses • 5,700+ banking centers • 93% of Hispanic households • 17,000+ ATMs • 86% of Asians • No. 1 online bank • 77% of African-Americans • 5,000+ affinity relationships
  7. 7. Our Size & Scale Matter We Are Where Customers Are In our footprint… • 76% of U.S. population Through… • 75% of small businesses • 5,700+ banking centers • 93% of Hispanic households • 17,000+ ATMs • 86% of Asians • No. 1 online bank • 77% of African-Americans • 5,000+ affinity relationships
  8. 8. Our Size & Scale Matter Ease of Doing Business – Customers Choose 1.1 billion teller transactions Banking Centers 1.3 billion transactions Affinity 1 billion Groups 3,275 ATM transactions Customer Touches per Merchant Second 8.1 billion Sales e-Commerce merchant 2 billion online Force sessions transactions Phone 2.6 billion call center 8 contacts
  9. 9. Our Size & Scale Matter Customer Delight 17% improvement 50.3% 49.6% 42.5% 2001 2005 2006 9
  10. 10. Our Size & Scale Matter Integrated Operating Model Product Distribution • Card • Insurance • Banking centers • Affinity groups • Deposits • Investments • e-Commerce • ATM channel • Mortgage, HELOC, • Small Business • Mortgage sales • Phone channel consumer loans products force • Mobile access 10
  11. 11. Our Size & Scale Matter Innovation 11
  12. 12. Our Size & Scale Matter National Franchise – Earnings Across our Markets 50% of NIBT driven by 15 large metro markets Seattle 1.5% Boston 3.5% Chicago 1.3% New York 5.4% San Francisco 4.5% Philadelphia 1.3% Baltimore 2.1% Washington, D.C. 3.4% Phoenix 2.6% Los Angeles 8.5% Dallas/ Atlanta 3.6% Ft. Worth 2.9% San Diego 1.7% Houston 2.1% Miami/ Ft. Lauderdale 5.4% 12
  13. 13. Our Size & Scale Matter Efficiency – Improving Efficiency While Growing 51% 49% 45% 2004 2005 2006 13 Pro forma with Fleet and MBNA
  14. 14. Our Size & Scale Matter Efficiency – Lowering Origination Costs Home Equity – Cost to Originate Credit Card – Cost to Acquire $100 $717 $84 $70 $484 $421 2005 2006 2007 Target 2005 2006 2007 Target 14 Note: Home Equity cost represents end to end origination and fulfillment.
  15. 15. Our Size & Scale Matter Brand – Critical to Growing a Retail Business Unaided Brand Awareness 43% 2006 Competitor Data 23% • Wells Fargo – 19% • Citibank – 19% • Wachovia – 16% • Chase – 20% 2000 2006 15 Source: Brand Research & Analytics, Fortune, FT
  16. 16. We Have a Proven Track Record of Growth
  17. 17. We Have a Proven Track Record of Growth Top Line and Revenue Mix Growth Revenue Revenue Mix 8% Noninterest income CAGR 4% Net interest income CAGR 6% CAGR $41.7 $37.0 $38.8 $41.7 $20.6 $38.8 $18.7 $17.5 $37.0 2004 2005 2006 2004 2005 2006 17 Pro forma with Fleet and MBNA ($B)
  18. 18. We Have a Proven Track Record of Growth Bottom Line Growth Net Income ($B) Return on Equity $11.2 17.7% 13% CAGR 15.8% 14.9% $9.4 $8.7 2004 2005 2006 2004 2005 2006 18 Pro forma with Fleet and MBNA
  19. 19. We Have a Proven Track Record of Growth Growing Customer Relationships Home Equity Production ($B) New Franchise Consumer Credit Cards* (MMs) 3.1 80.8 72.0 61.0 2.2 1.8 1.6 38.0 30.0 1.2 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 New Debit Cards (MMs) Net New Checking Accounts (MMs) 5.3 2.3 2.4 4.8 2.0 4.1 3.2 1.2 2.5 0.4 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 19 *MBNA is not included 2002-2004
  20. 20. We Have a Proven Track Record of Growth Deposits – Success at Balancing Profitability and Growth Growing Deposits While Lagging Rates Paid 12% 80% Cumulative Cumulative % of Fed Consumer Funds Increase Deposit Passed on to Growth Customers 6% 40% 0% 0% 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 Cumulative Pass Through % of Fed Funds Increase (since Q204) Cumulative Consumer Deposit Growth (ex MBNA) 20
  21. 21. We Have a Proven Track Record of Growth Proven Execution – Sales Growth Net New Checking Accounts (MM) Total Sales Units (MM)* CAGR = 13.8% 2.4 44.4 2.3 2.1 41.5 34.3 1.2 0.4 0.2 2001 2002 2003 2004 2005 2006 2004 2005 2006 21 *Pro forma with Fleet and MBNA
  22. 22. We Will Continue to Grow
  23. 23. We Will Continue to Grow Household Growth Multi-Product Households Single-Product Households 41% Multi-Product 55.7 Household Growth 19.7 39.4 Households (MMs) 27.6 17.8 14.0 Legacy BAC Legacy BAC and Fleet Legacy BAC, Fleet and MBNA 23
  24. 24. We Will Continue to Grow Franchise Opportunities Market Share And yet… Deposit #1 12.5 million Deposit HHs with a deposit Balances product only Small Business #1 2 million Small Business HHs with one Deposits product only Credit Card #1 Card customers have $250B of balances Balances with competitors HELOC #1 77% of BAC HHs get their HELOC Originations elsewhere 1st Mortgage #6 94% of BAC HHs get their Mortgage with Originations others 24 All Information as of 3Q06 – Includes MBNA Customers
  25. 25. We Will Continue to Grow Innovation and Integration – Driving Execution Consumer Lending • Saying “yes” more to our customers 25
  26. 26. We Will Continue to Grow Innovation – “Cup of Coffee” Home Equity % of Applications With % of Loans* Ready to Close in 1 Hour Instant Decision 75% 64% 38% 43% 17% 0% Apr 06 Dec 06 Dec 07 Apr 06 Dec 06 Dec 07 26 *Of apps <$250k, not in SC/TX, not multi-family, in a trust or a flood zone (81% of apps)
  27. 27. We Will Continue to Grow First Mortgage First Mortgage Market $750 4.1% Market Size Billions $650 3.3% 3.4% 3.0% 2.9% $550 $450 $350 $250 4Q05 1Q06 2Q06 3Q06 4Q06 Market Share % Market Size $B 27
  28. 28. We Will Continue to Grow Innovation and Integration – Driving Execution Consumer Lending • Saying “yes” more to our customers Card / Affinity • Growing through combined capabilities 28
  29. 29. We Will Continue to Grow Card/Affinity Banking U.S. Franchise Card Sales – (MM) (Banking Center and e-Commerce) 46% increase 4.1 2.8 2005 2006 29
  30. 30. We Will Continue to Grow Innovation and Integration – Driving Execution Consumer Lending • Saying “yes” more to our customers Card / Affinity • Growing through combined capabilities Small Business • Increasing revenue as a full-service provider 30
  31. 31. We Will Continue to Grow Small Business Banking Growth Opportunity Small Business Customer Penetration 22.4% 20.8% 18.2% 2003 2004 2005 31
  32. 32. We Will Continue to Grow Innovation and Integration – Driving Execution Consumer Lending • Saying “yes” more to our customers Card / Affinity • Growing through combined capabilities Small Business • Increasing revenue as a full-service provider Market Optimization • Attacking market-specific opportunities 32
  33. 33. We Will Continue to Grow Optimizing Market Opportunities Retail Deposit Balance Share1 27% 25% 24% 24% 23% 23% 23% 22% Retail Balance Share 17% 17% 16% 14% 9% 4% 1% go a on go C n i an LA y x e tle s rk m nt ill ni or to la D ca Yo st ia Fr ie at Ph tla oe al os tim M D ou hi Se D n A Ph ew B n C Sa al H Sa B N 33 1 Source: June 2006 FDIC /(MSA defined geographies)
  34. 34. We Will Continue to Grow Los Angeles and Washington, D.C. Los Angeles Washington, D.C. Total Market 4.2MM 1.8MM Households BAC Deposit HH 62% 42% Penetration Ethnic Diversity 64% 43% Top 3 Competitors Wells Fargo Wachovia Washington Mutual SunTrust Citigroup BB&T 34
  35. 35. We Will Continue to Grow Outpacing the Market Los Angeles Washington, D.C. Deposit Household Growth Deposit Household Growth 4% 4% 8% 8% 1% 1% 2% 2% BAC Total Market BAC Total Market HELOC Origination Growth HELOC Origination Growth 26% 26% 9% -24% -9% -9% BAC Total Market BAC Total Market 35 All Information as of 3Q06
  36. 36. We Will Continue to Grow Los Angeles Opportunity – Deepen Relationships Market Share And yet… Credit Card #1 Card customers carry $13B of balances Balances with competitors HELOC #1 73% of BAC HHs get their HELOC Originations elsewhere ($17B) 1st Mortgage #8 96% of BAC HHs get their Mortgage with Originations others ($102B) 36 All Information as of 3Q06 – Includes MBNA Customers
  37. 37. We Will Continue to Grow Washington, D.C. Opportunity – Acquire and Deepen Market Share And yet… Deposit Balances #1 1 million households do not have a deposit relationship with us Credit Card #1 Card customers carry $5.5B in balances Balances with competitors HELOC #1 75% of BAC HHs get their HELOC Originations elsewhere ($5.4B) 37 All Information as of 3Q06 – Includes MBNA Customers
  38. 38. We Will Continue to Grow Optimizing Market Opportunities – Community Division 38
  39. 39. We Will Continue to Grow Total Sales Growth in the Community Division 18% Growth 4.0MM 3.4MM 2005 2006 39
  40. 40. We Will Continue to Grow Innovation and Integration – Driving Execution Consumer Lending • Saying “yes” more to our customers Card / Affinity • Growing through combined capabilities Small Business • Increasing revenue as a full-service provider Market Optimization • Attacking market-specific opportunities Megatrends • Diversity, population shifts, technology
  41. 41. We Will Continue to Grow Megatrends Diversity • Demographic changes create opportunity Population Shifts • Education and healthcare emerge as growth sectors Technology • Customers are taking control 41
  42. 42. We Will Continue to Grow Hispanic Segment – GCSBB Results and Opportunity 42
  43. 43. We Will Continue to Grow Megatrends Diversity • Demographic changes create opportunity Population Shifts • Education and healthcare emerge as growth sectors Technology • Customers are taking control 43
  44. 44. We Will Continue to Grow Aging Population Average Out-of-pocket Health Care 55+ Population Growth Expenses for Seniors $3,588 26% 115% increase increase 86MM 68MM $1,658 2005 2014 2005 2014 Source: US Census, US Department of Health and Human 44 Services, McKinsey & Company
  45. 45. We Will Continue to Grow Healthcare Solutions GCSBB and GWIM GCSBB, GWIM and GCIB Providers Payors (e.g. clinic, Drs, (e.g. Insurers) Total Industry Mass Customers/hospitals) Providers Payors Profit Employers Affluent Employers e.g. clinic, doctors, hospitals e.g. Insurers Opportunity $10B+ Annually • Health Savings • On Line Health • Receivables • Imaging Accounts Insurance Management Solutions • Cash flow • Health-themed (eHealth) • Electronic management affinity credit Eligibility card • Discounted Verification • Investment Pharmacy banking services • Health Benefit for healthcare Insurance Program industry • Long-term care insurance Source: BAC Analysis, McKinsey & Company; note – industry 45 opportunity represents annual pre-tax operating profit
  46. 46. We Will Continue to Grow College Enrollment & Cost Projections College Enrollment Cost to Earn a Degree 43% of HH Income $120K 12% Increase 28% of HH 19.5MM Income $70K 17.4MM Current +10 Years Current + 10 Years Source: National Center for Education Statistics; The College Board Average annual cost of a public 4 year institution 46 Average time to complete a bachelor’s degree: 5.5 years
  47. 47. We Will Continue to Grow Education Opportunity Vision: Become the “Provider of Choice” for Education Financial Solutions GCSBB and GWIM GCSBB, GWIM and GCIB Specialty Education Finance Parents Students Alumni Institutions Companies • 529 College • Government & • Alumni Cards • Financing and • Financing and Savings Plans Private Student (Collegiate Cash Cash Loans Affinities) Management Management Solutions Solutions • Checking With • Student • Consolidation • Endowment • Asset Online Account Checking, of Student Management Securitization Transfers & Savings and Loan Debt “Keep The Card Change” for Solutions maximizing college savings 47
  48. 48. We Will Continue to Grow Megatrends Diversity • Demographic changes create opportunity Population Shifts • Education and healthcare emerge as growth sectors Technology • Customers are taking control 48
  49. 49. We Will Continue to Grow Online Banking Growth Online Banking Active Users Incremental Online Customer Relationship Value* 21.2 CAGR = 42.9% 14.7 28% 27% 12.4 15% 7.2 2003 2004 2005 2006 Deposit Loan Profitability Balances Balances Bill Pay users Access Only 49 *Three years after going online, combined access-only and bill pay customers
  50. 50. We Will Continue to Grow Mobile Banking • 215MM handsets across the U.S. • More than 85% of mobile phone subscribers have access to mobile Internet 50
  51. 51. We Will Continue to Grow Customers Take Control Customer 51
  52. 52. Competitive Differentiators • Our size & scale matter • We have a proven track record of growth • We will continue to grow 52
  53. 53. In Summary Our size and scale matter • Unmatched national franchise • Integrated operating model • Customer information enables continuous innovation We have a proven track record of growth We will continue to grow • 6-9% earnings growth • Unlimited opportunity in our markets • Consumer Credit and Small Business • Marketplace megatrends 53
  54. 54. Consumer Credit Bruce Hammonds Global Consumer & Small Business Banking President Card Services
  55. 55. Consumer Credit: Why we are Positioned to Grow • Strong customer base • World class products and services • Broader distribution • Industry leading risk adjusted margins 55
  56. 56. Consumer Credit: Strength With Room to Grow Total Credit of BAC Customers $455B $518B $4,050B $80B $5,100B 70% $4.5 trillion 85% 84% opportunity 93% 90% within existing customer base 30% 15% 16% 10% 7% Credit Card Home Equity Mortgage Unsecured Total Credit On Us Off Us 56
  57. 57. Credit Solutions Continuum Customer credit needs Student Secured Unsecured Unsecured First Home Lending Credit Card Credit Card Lines Mortgage Equity Relationship-based Common Decision Engine Banking Call Client Mobile E-Commerce ATM Centers Centers Managed Banking Delivery channels 57
  58. 58. Home Equity Leader With Room to Grow $90 10.0% BAC Balances ($B) BAC Market Share 9.5% $80 9.0% $70 8.5% $60 8.0% 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 Ending Balance Market Share • Net credit losses are expected to range between 10 and 25 bps • Average refreshed FICO score of 724 • Current cumulative LTV of 63% for overall portfolio 58 Footnote: 4Q06 Market Share is estimated
  59. 59. First Mortgage First Mortgage Market $750 4.1 3.3 Market Share % $650 3.4 Market Size ($B) 3.0 2.9 $550 $450 $350 $250 4Q05 1Q06 2Q06 3Q06 4Q06 Market Size $B Market Share % • Net Credit Losses are expected to range between 5 and 9 bps • Average refreshed FICO score of 729 • Current LTV of 57% for overall portfolio 59
  60. 60. Top U.S. Credit Card Issuers 2006 Bank of America is the leading credit card issuer in $203 Total Card Services the U.S. with $152 billion in managed loans. $17 Consumer Finance $34 International $152 $ in Billions $147 $108 $54 $54 $46 BAC Card JP Morgan Citi Am erican Capital One Discover Services Chase Express Source: Ending loans based on company reports (excludes 60 international and private label)
  61. 61. Sales & Service Delivery Channels – U.S. Card • Leveraging banking center and Internet channels • Greater convenience, lower cost, higher return CTA* $109 $100 $84 $70 17% 24% 37% 44% Franchise 41% 37% Direct Mail 27% Other 23% Internet 21% 19% 13% Media Marketing 13% 5% 8% 12% 11% 16% 12% 11% 10% 2004 2005 2006 2007 Plan * Actual 2006 CTA by channel was utilized to calculated 2004-2005 estimates shown and are 61 not actual historical values . The value will therefore reflect change in mix only.
  62. 62. Asset Quality • Industry losses ranged between 5% and 6% from 2000 through 2005 $3,500 10.00% $2,881 8.00% 7.07% 5.08% 5.20% 6.00% 4.79% 4.56% 4.23% 3.67% 3.12% 4.00% $1,950 $1,994 $1,907 $1,906 $1,748 2.00% $1,474 $1,246 0.00% -2.00% 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 Managed Consumer Credit Card Charge-off Ratio Managed Consumer Credit Card Charge-offs ($MM) 2005 data is pro forma and includes combined BAC and MBNA managed consumer 62 credit card charge-offs
  63. 63. Channel Diversity Leverages Value of Relationships 16% 13.9% 14% $200 11.4% 12% 10% 8.9% 9.1% 8.9% 7.6% 8% $100 6% 4.9% 3.7% 4% 2% Stores/Online Customer DM Affinity/Cobrand Non-Customer Yr 2 Avg Bal $1,140 $2,133 $2,902 $1,965 Yr2 NCL 5 Yr Avg RAM CTA (Pre-Tax) 63
  64. 64. Emerging Markets - Hispanic Marketing to our Customers • Hispanic Family Dream Campaign • Offer unsecured, partially secured and fully secured cards • In-Culture marketing and product development • Thin / no file credit modeling – Alternative credit scores combined with relationship scores – Unsecured card offers to the right existing relationship customers • End-to-end in-language service & fulfillment 64
  65. 65. New Products In Market 1Q07 Bank of America American Express Ownership Rewards Keep the ChangeTM & Credit Bundle MLB Extra Bases GWIM Amex VIP Caremark 65
  66. 66. Affinity Marketing “Success is getting the right customers… and keeping them” • Affinity marketing – selling to people with a strong common interest… • Who have a strong propensity to accept other endorsed products 66
  67. 67. Affinity Marketing Customers Have a propensity to accept multiple endorsed products. Example: National Education Association • More than one-third of teachers nationwide carry Bank of America cards • 3.1 million members • $2.5 billion in credit card loans • $925 million in other consumer loans • $4.4 billion in deposit balances 67
  68. 68. International • $34 billion in loans • 12% growth in 2006 (excludes impact from FX) United Kingdom Ireland • No. 1 Market Share in the U.K. • 1,500 endorsements • Exploring other international opportunities Canada Spain 68
  69. 69. Our Unique Model • More customers • More data • Broader distribution • Leading risk-adjusted margins • Industry leading profitability • Unmatched growth opportunities 69
  70. 70. Mass Market Small Business Mark Hogan Global Consumer & Small Business Banking Small Business Banking President
  71. 71. Mass Market Small Business • Why focus on Small Business? • Why is Bank of America unique in the Small Business market? • How are we executing to deliver growth? 71
  72. 72. Small Business Customers • Revenue under $2.5MM Corporate > $2B Sales • Credit exposure under $250K GCIB Client Managed Commercial • Owners wear many hats $20MM – $2B Sales Business • Frequent banking centers Banking $2.5MM – $20MM Sales 322,000 in footprint • Integrated personal and business finances Small Business Less than $2.5MM Sales 23 million in footprint • Non-client managed customers 72 * 2003 Census & IRS sole prop data & market research (Market Share Monitor)
  73. 73. Building Momentum Deposits ($B) Loans ($B) 6% Growth 21% Growth $29.5 $53.4 $50.5 $24.3 2005 2006 2005 2006 Avg. Balances Avg. O/S Sales (units in millions) Income Statement Trends 19% Growth $5.3 27% Growth $4.5 2.4 23% Growth 1.9 $2.8 $2.3 2005 2006 2005 2006 2005 2006 NIBT ($B) Revenue ($B) 73
  74. 74. Small Business Revenue Opportunity • Large revenue opportunity • Total market revenue growth 5 – 8% each year • Claiming natural Bank of America share 74 * 2003 Census & IRS sole prop data & market research (Market Share Monitor)
  75. 75. Small Business Revenue Opportunity $49 Billion Revenue Opportunity • Large revenue opportunity • Total market revenue growth 5 – 8% each year • Claiming natural Bank of America share 75 * 2003 Census & IRS sole prop data & market research (Market Share Monitor)
  76. 76. Small Business Revenue Opportunity $49 Billion Revenue Opportunity • Large revenue Current opportunity BAC Share $5.3B • Total market revenue growth 5 – 8% each year • Claiming natural Bank of America share 76 * 2003 Census & IRS sole prop data & market research (Market Share Monitor)
  77. 77. Small Business Revenue Opportunity $49 Billion Revenue Opportunity • Large revenue Natural opportunity BAC Share $8B • Total market revenue growth 5 – 8% each year • Claiming natural Bank of America share 77 * 2003 Census & IRS sole prop data & market research (Market Share Monitor)
  78. 78. We are Where Customers are • No one dominates Small Business market • 23MM Small Businesses in our geography • 30% in NY, FL, TX, CA – significant Bank of America retail presence 78 * 2003 Census & IRS sole prop data & market research (Market Share Monitor)
  79. 79. Growth Sectors of the Market Annual growth rates in the number of Small Businesses African-American Owned 7.8% Hispanic Owned 5.6% Asian Owned 4.5% Women Owned 3.7% Small Business 3.4% U.S. Household 1.1% 79 Source: Small Business Administration and Census Bureau firm data for 1998 to 2003
  80. 80. Voice of the Small Business Customer • More likely to aggregate personal and business wallet • Want to grow his or her business • Don’t want to be bogged down by administrative tasks 80
  81. 81. Consumer Model for Small Business Integrated and Accountable Small Business Leadership Business Distribution Products Integration Channels Customers 81
  82. 82. How we will Grow • Increasing penetration Penetration Opportunity 50% 22% Small Consumer business household household penetration penetration 82 Market research (Market Share Monitor)
  83. 83. How we will Grow • Increasing penetration Credit Share – Market Opportunity • Deepening relationships through credit 16% 5% 6% 2005 credit 2006 credit Benchmark share share (BAC business deposit share) 83 Market research (Market Share Monitor)
  84. 84. How we will Grow • Increasing penetration • Deepening relationships through credit • Simplified products and processes 84
  85. 85. How we will Grow • Increasing penetration • Deepening relationships through credit • Simplified products and processes • Innovative products and processes 85
  86. 86. How we will Grow • Increasing penetration • Deepening relationships through credit • Simplified products and processes • Innovative products and processes • Expanded sales and service capabilities 86
  87. 87. How we will Grow • Increasing penetration • Deepening relationships through credit • Simplified products and processes • Innovative products and processes • Expanded sales and service capabilities • Enabling associates 87
  88. 88. How we will Grow • Increasing penetration 2005 – 2006 Sales by Channel • Deepening relationships through credit • Simplified products and processes • Innovative products and processes • Expanded sales and service 27% 70% 324% capabilities Total Small Business Telephone* e-Commerce • Enabling associates • Expanded channel capabilities 88 * Excluding debit
  89. 89. Capturing the Small Business Opportunity • Well positioned to capture Small Business revenue opportunity • Unique customer-centric structure enables integration, innovation and execution • Using technology to offer simple package solutions and credit, expand capabilities 89

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