Further Proof The Turnaround At Bank of America Corp Is Underway

Put simply, Bank of America (NYSE: BAC  ) has struggled in recent years. But it turns out that's all changing. 

The difficult stretch
Following the financial crisis and its subsequent missteps like the $5 debit card fee fiasco, countless people began to truly hate Bank of America. After all, the latest poll from Harris evaluating the reputation of the 60 largest companies in America revealed Bank of America had the lowest reputation of all firms, with a score of 55 on a 100 point scale.

There is much to be done when it comes to improving its reputation, but one of the principal places it needs to start with is its customers.

And it turns out, Bank of America has been doing just that.

The remarkable improvement
At its latest annual meeting, which was met by outbursts and protests, and a bizarre marriage proposal to CEO Brian Moynihan from a shareholder who said she loved him, Bank of America confronted many of the troubles that continue to plague it. Yet a particular slide from its presentation revealed the turnaround indeed is under way:


Source: Company Investor Relations.

In typical banking fashion, the chart is communicated in basis points. But in short, it's showing if 50% of its customers were satisfied in 2011 that number now stands at 60%.

Things are looking up at Bank of America.

I say "if 50%" because the baseline numbers aren't shown, but an improvement of 10 percentage points from any number, whether it be 80% to 90% to or 30% to 40% would be a significant improvement.

Through online and mobile banking, time of processing requests, or more generally broader satisfaction, Bank of America is undeniably making significant improvement in the eyes of its customers.

Remember it was just a few weeks ago when we learned Bank of America's improvement in the J.D. Power customer satisfaction rating across the eleven areas outpaced the industry average.

With 92 million accounts, a gain of 10% means millions upon millions more are happy.

The key takeaway
When customers at Bank of America go from simply having a checking account to establishing more borrowing and investing relationships, the increase in revenue generated skyrockets from $340 to $3,000. By focusing on customer satisfaction, the company is rightly banking on developing these deeper -- more profitable -- connections, which means big impacts to both the top and bottom lines. Goldman Sachs Presentation, slide 18

There's clearly still a lot of room for improvement at Bank of America. And while we may be years away from a full turnaround, evidence like the chart above prove it's moving in the right direction, which could mean big things in the years to come.

Big banking's little $20.8 trillion secret
While Bank of America is undoubtedly improving, it's rushing to beat a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banks. That's bad for them, but great for investors. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. To learn about about this company, click here to access our new special free report.


Read/Post Comments (6) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On May 12, 2014, at 12:29 PM, ScottPletcher wrote:

    BAC doesn't want to show its current satisfaction rating because it's so bad. Yes, they're likely getting better, but partly that's because they started so low there was practically nowhere to go but up.

  • Report this Comment On May 12, 2014, at 12:51 PM, funfundvierzig wrote:

    The ingrained customer-hostile, investor-hostile culture of this corrupt banking conglomerate and its mediocre Management has certainly taken its toll on consumer sentiment! We won't even mention investor sentiment, with the price of the stock crashing in seven years, down from 52 to 14 and change ( a whopping decline of over 70%).

    ...funfun..

  • Report this Comment On May 12, 2014, at 2:36 PM, kthor wrote:

    Financial error after tens of millions of CEO bonus, great idea! we want that bonus back mr BAC CEO!

  • Report this Comment On May 12, 2014, at 4:11 PM, Rexyz wrote:

    I think going to one of the annual BAC stockholder’s meetings would put a smile on anyone’s face: How often does the CEO (Brian Moynihan) get a marriage proposal! :) I enjoyed his quick thinking and wit…he certainly is a very capable person. This article is really good, in the sense that it puts a number on what most of us have been viewing from the sidelines. The time is finally here to get back in the game. We have had out fun with Socialism and it was interesting to watch and listen to people who “believed” they should not repay borrowed money from the Banks (Stockholders). So I leave you with Margaret Thatcher’s words: “The problem with Socialism is that you eventually run out of other people’s money”. Questions???? :)

  • Report this Comment On May 12, 2014, at 4:59 PM, hjpatel wrote:

    Bank of America investors will be rewarded. I forecasted Fair value growth over the next 10 years. It has the possibility of trading in the 30's-40's

    http://investingcrunch.com/articles/2014/05/05/fair-value-gr...

  • Report this Comment On May 12, 2014, at 9:40 PM, funfundvierzig wrote:

    Folks, the proliferation of abusive personal attacks against bank securities analysts and individual investors who refuse to buy into the propaganda and hype coming out of this bank suggests the bank is in deep trouble with tonnes to hide.

    It's one of the oldest and dirtiest PR tricks to distract the attention away from the scandal and malmanagement of this corrupt bank: initiate off-topic ad hominem attacks on independently-speaking bloggers, not only at this internet site, but other news and investment forums over the net as well. That unethical, unprofessional misconduct speaks volumes.

    ...funfun..

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