Further Proof The Turnaround At Bank of America Corp Is Underway

Bank of America has had a tough run over the last few years, but recent evidence reveals the turnaround is indeed underway.

May 12, 2014 at 11:45AM


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.

Patrick Morris owns shares of Bank of America. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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