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Client Case Study |
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- The second largest bank in the US by Assets in 2011
- One of the largest branch networks in the US with about 5,700 locations and 17,000 ATM
- Total Assets (2011): $2,130 billion
- Employees (2011): 282,000
Project New BAC
Phase 1
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Timeline: May to September 2011
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Scope: Consumer Businesses (incl. Deposits, Card Services and Consumer Real Estate Services), Consumer Business support; as well as technology and operations functions.
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Announced Impact: Cost reduction of $5 billion per year by 2015.
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Start of Implementation: 2011
Phase 2
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Timeline: October 2011 to April 2012
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Scope: Global Wealth and Investment Management, Global Commercial Banking, Global Banking and Markets, as well as related support, technology and operations functions.
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Announced Impact: Cost reduction of $3 billion per year by 2015
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Start of Implementation: 2012. All aspects of New BAC are expected to be implemented by 2015.
Structural and Operational Improvements
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CEO Brian Moynihan transformed the company from a product-driven business to a customer-driven business. The company is now structured to better focus on three core customer groups: individuals, companies and institutional investors.
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Project New BAC made the business more effective and efficient within this new customer-relationship strategy, among others by
- Simplifying processes
- Stopping unnecessary activities
- Consolidating duplicative functions
- Improving connections between departments
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Simplifying operating platforms: elimination of obsolete applications and investment in next generation technology, e.g. eliminating overlapping deposit systems
- Brian announced that more than 3,000 ideas would be implemented out of 150,000 ideas generated
Earnings Announcement Six Months into Implementation
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Excellent capital ratios
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Strong growth
- Deposits up 6%; AUM up 27%; commercial loans up 13%; Investment bank revenues up 42%
- Cross selling: 28% increase in new 401k assets from existing clients
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Top performing stock in 2012
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