Page 23 - Bank of America E Case Study
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BofA: Recovery
The recovery in the U.S. has, since 2009, been stronger
and more sustained that was thought possible initially.
Against this background the BofA has made substantial
gains as its programme of stock buyback accelerated.
The election of President Donald Trump, the perception
that the new administration would relax banking
regulation and the potential for rising interest rates
impacted on BofA helping to boost its profits.
“Mr Moynihan is now hacking away at anything not
directly related to servicing Bank of America clients. He
has got rid of stakes in Santander, BlackRock, China
Construction Bank and Banco Itaú; credit-card businesses
in Britain, Canada, Ireland and Spain; and a slew of
private-equity investments. He has kept hubs in London
and Hong Kong for trading and investment banking,
which act as a conduit between foreign clients and
America, and American clients and the world. But wealth
management, once offered in 35 countries, is now
offered in just one—America.” (26)
Nevertheless, as recently as February 2016, BofA’s shares
traded at half their accounting value. Regulations that in
effect outlawed acquisitions constrained its opportunities
for growth. Investors had little faith in the worth of its
assets, or indeed in its strategy. (26)
It is only in the last year 2017/8 that its share price has
really re-bounded and in the last year it doubled.
