Bank of America Corp. (BAC), one of the world's largest investment banks and financial institutions, serves a broad range of customers, including individual consumers, wealthy investors, large corporations, and governments. It operates primarily in the U.S., where it gets the vast majority of its revenue, as well as in dozens of countries around the globe. The company faces a broad array of competitors, including JPMorgan Chase & Co. (JPM), Citigroup Inc. (C), Goldman Sachs Group Inc. (GS), credit card issuers like Visa Inc. (V), hedge funds, and private equity firms. The Charlotte, North Carolina-headquartered company expanded from a regional player into a global giant through a series of major acquisitions in the past several decades.

Key Takeaways

  • Bank of America provides financial services to customers including consumers, wealthy investors, institutional clients, and governments.
  • The company's Consumer Banking segment provided the largest share of total revenue in 2020, but Global Markets had the fastest revenue growth.
  • Bank of America cut some of its staff in the global banking and markets division in January 2021.

Bank of America's Financials

Bank of America has staged an operational turnaround in the wake of the 2008 financial crisis, when many experts feared it might slip into bankruptcy. But the company is once again feeling the adverse effects of an economic crisis, this time one stemming not from within the financial sector but from the COVID-19 pandemic. Bank of America reported a fall in total revenue, net of interest expense, of 6.3% to $85.5 billion for its 2020 fiscal year (FY), which ended December 31, 2020. Net income declined 34.8% to $17.9 billion compared to the previous year. The bank's net interest income, a key indicator, declined 11.3% to $43.4 billion in FY 2020.

Bank of America's Business Segments

Bank of America's four business segments are categorized predominantly according to the types of customers utilizing each area. The Consumer Banking segment is focused on consumers and small businesses, while the Global Wealth & Investment Management segment addresses the needs of individual clients with over $250,000 of total investable assets. Global Banking provides investment banking services and related products, while Global Markets focuses on institutional clients. The data shown in the pie charts above excludes negative revenue in the company's "All Other" segment, which is outlined in further detail below.

Consumer Banking

The Consumer Banking segment provides varied credit, banking, and investment products and services to small businesses and consumer clients. These range from traditional savings accounts, CDs, and IRAs, to credit and debit cards, residential mortgages, and loans. In FY 2020, Consumer Banking accounted for 37% of total revenue and about 36% of net income. The segment generated the most revenue across all segments, accounting for $33.3 billion in revenue. This is down about 13.8% from FY 2019. Consumer Banking net income fell 49.8% to $6.5 billion, but still comprised the largest share of the company's total net income for the year.

Global Wealth & Investment Management

The Global Wealth & Investment Management segment provides financial advisory, brokerage, banking, and retirement products to clients with large amounts of investable assets. In FY 2020, this segment generated $18.6 billion in revenue, down 4.9% from the previous year. This segment also accounted for $3.1 billion in net income, a decrease of 27.7%. Global Wealth & Investment Management represented about 21% of total revenue and 17% of net income for FY 2020.

Global Banking

Bank of America's Global Banking segment offers lending-related products and services, including underwriting and advisory services, as well as investment banking products. The customers in this segment are most commonly middle-market companies, commercial real estate firms, not-for-profit organizations, and corporations of various sizes. Global Banking generated $19.0 billion in revenue for the year. This was down 7.3% from FY 2019. Global Banking also generated $3.5 billion in net income, down 57.0%. The segment accounted for 21% of revenue and 19% of net income in FY 2020.

Global Markets

The Global Markets segment provides sales and trading services as well as research services to institutional clients, including financing, securities clearing, settlement, custody, and market-making services. The segment generated $18.8 billion in revenue for FY 2020, up 20.2% from the previous year. It accounted for $5.2 billion in net income, up 50.0% from FY 2019. Global Markets made up about 21% of all revenue and 29% of net income for the year.

'All Other' Segment

Bank of America's "All Other" segment includes non-core mortgage loans, liquidating businesses, equity investments, and other activities which are not categorized in one of the four primary segments above. This segment posted a revenue loss of $3.6 billion and net loss of $407 million in FY 2020.

Bank of America's Recent Developments

Bank of America cut some of its staff in the global banking and markets division, Bloomberg reported at the end of January 2021. The layoffs affected employees in sales and trading, research, investment banking, and capital markets. It is typical for Wall Street banks to make staffing changes around this time of year. But the move comes months after Bank of America CEO Brian Moynihan pledged not to lay off any employees in 2020 amid the pandemic, signalling that the suspension of layoffs has not carried over into the new year.

How Bank of America Reports Diversity & Inclusiveness

As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Bank of America and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Bank of America releases to show you how it reports the diversity of its board and workforce to help readers make educated purchasing and investing decisions.

Below is a table of potential diversity measurements. It shows whether Bank of America discloses its data about the diversity of its board of directors, C-Suite, general management, and employees overall, as is marked with a ✔. It also shows whether Bank of America breaks down those reports to reveal the diversity of itself by race, gender, ability, veteran status, and LGBTQ+ identity.

Bank of America Diversity & Inclusiveness Reporting
  Race Gender Ability Veteran Status Sexual Orientation
Board of Directors      
C-Suite
 
       
General Management (U.S. Only)      
Employees ✔ (U.S. Only)