Abstract
Overview
Introduction
With more than 160 million cards in issue, Bank of America is one of the
world' s biggest issuers. It has continued to expand its cards business at home
and abroad both organically, particularly through the use of affinity
marketing, and by the acquisition of MBNA.The company is highly prolific in
the US,with more than 55 million customer relationships, while MBNA is the
largest issuer in the UK.
Reasons to Purchase
- Gain a detailed understanding of Bank of America' s strategy and approach
in the card issuing space.
- Find out Datamonitor' s opinion on Bank of America' s future outlook in
cards.
- Learn how Datamonitor rates Bank of America' s card operations in its
unique competitor benchmark operation.
Table of Contents
- Overview
- Table of Contents
- Table of figures
- Table of tables
- Bank of America
- Key findings
- Company overview
- Background
- Ownership and management
- Bank of America board of directors
- Employees
- Management values
- Company structure
- Bank of America' s cards business is part of the Global Consumer and
small Business Banking Group
- Geographic coverage
- Bank of America' s international cards focus is on Canada, the UK and
Continental Europe
- Strategic focus
- Bank of America' s cards business sits in its Global Consumer and Small
Business Banking division
- Cards services accounts for a significant proportion of Bank of
America' s revenues
- Bank of America is the largest issuer in the US with a strategy
revolving around organic growth.
- A strong distribution network is key to Bank of America' s issuing
and client servicing strategies
- Bank of America uses affinity marketing to grow its card business
- Bank of America has been aggressively growing its loan book
- Bank of America also focuses on maintaining a high quality clientele
in order to contain risks
- In foreign markets, Bank of America continues to operate under the
MBNA brand
- Outside of the US, Bank of America acts as a monoline player in the
issuing market
- As in the US, there is a strong emphasis on affinity marketing
- MBNA also follows the policy of aggressively building outstandings
- Card statistics
- Number of cards in issue
- Balances outstanding
- Key financials
- Profit and loss account
- Balance sheet
- Card product offering
- In the US, Bank of America has a wide range of card products to suit
all consumers.
- Affinity cards are an ' off the shelf' solution for linking
organizations to card products
- The second main product type offered is reward cards
- Outside the US, Bank of America also focuses on the affinity and
co-branded markets
- In the UK, MBNA offers a range of co-brands and affinity products,
as well some own-brand cards
- In Canada, MBNA has a similar product line to Bank of America in the
US
- MBNA has a far more limited selection of products in Ireland
- Company outlook
- Bank of America' s position in the US market is secure
- Within the US, Bank of America has a wide product range, leaving it
well-placed for organic growth
- Bank of America also benefits from a strong distribution network in
the US
- Bank of America is in a reasonably strong position to get through
the current liquidity crisis
- However, saturation in the US market makes continued international
expansion a priority
- Bank of America is examining the possibility of expanding its
international cards offering to other markets
- Outside of the US, the cards business may not be as robust in a
downturn
- Datamonitor Competitor Benchmark
- APPENDIX
- Definitions
- Affinity card
- Charge card
- Co-branded card
- Commercial card
- Credit card
- Premium cards
- Private label card
- Data relating to the graphics in this profile
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Bank of America board of directors, 2006
- Table 2: Bank of America Card Statistics, year end 2006
- Table 3: Revenue, costs and profit for Bank of America, 2002-2006
- Table 4: Bank of America cashback cards, 2008
- Table 5: A selection of co-branded airline cards, 2008
- Table 6: A selection of cruise line co-branded products
- Table 7: A selection of MBNA cards in the UK, 2008
- Table 8: Details of MBNA products in Canada, 2008
- Table 9: A selection of MBNA products in Ireland
- Table 10: Scorecard logic, part one
- Table 11: Scorecard logic, part two
- Table 12: Sources of Bank of America revenue, 2006
- Table 13: Bank of America credit card charge off ratio, US, 2006-2007
- Table 14: Bank of America credit card delinquency ratio, US, 2006-2007
- Table 15: Bank of America, number of cards by country, 2002-2006
- Table 16: Bank of America, revenue and costs, 2002-2006
- Table 17: Bank of America revenue sources, 2002-2006
- Table 18: Bank of America Balance sheet, 2002-2006
- Table 19: Current relevant Datamonitor publications, 2007-08
- Table 20: Future relevant Datamonitor publications, 2008
- List of Figures
- Figure 1: Card Services produced 25% of Bank of America earnings in
2007
- Figure 2: Bank of America is active in the North American, European
and east Asian markets
- Figure 3: Card services sits in the Global Consumer and Small Business
Banking division of Bank of America
- Figure 4: Within cards services, consumer cards in the US generates
more than two thirds of the revenue, H1 2007
- Figure 5: Bank of America is the largest issuer in the US in terms of
receivables, 2007
- Figure 6: Bank of America has more than 6,000 bank branches across the
US, 2007
- Figure 7: Bank of America uses multiple channels to reach potential
customers
- Figure 8: Affinity marketing plays a large part in Bank of America' s
cards strategy
- Figure 9: Bank of America has been increasing its card-based lending,
2006-2007
- Figure 10: The delinquency rates at Bank of America have risen
modestly through 2007
- Figure 11: Bank of America enjoys a low, but climbing, charge off ratio
- Figure 12: Balance transfer offers: good for the cardholder, not so
good for the issuer
- Figure 13: The acquisition of MBNA considerably boosted Bank of
America' s card issuance, 2002-2006
- Figure 14: Bank of America' s revenue has more than doubled from
2002-2006
- Figure 15: Global Consumer and Small Business Banking contributed 56%
of Bank of America' s revenue in 2006
- Figure 16: Growing revenue and controlled costs have resulted in Bank
of America' s profits doubling from 2002-2006
- Figure 17: Bank of America has a strong balance sheet, 2002-2007
- Figure 18: All Bank of America Alumni cards have the same basic
features
- Figure 19: Bank of America has a number of charity affinity cards
- Figure 20: Bank of America provides incentives to encourage consumers
to sign up for products
- Figure 21: MBNA' s BT credit card allows consumers to reduce their
phone bills
- Figure 22: MBNA is tapping the green market in Canada, 2008
- Figure 23: Holders of the Ryanair card receive a bonus flight after
their first purchase
- Figure 24: The Fly and Buy! Card allows cardholders to redeem points
to a range of destinations, 2008
- Figure 25: Datamonitor competitor benchmark - Bank of America
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