Tomahawk, WI 8/19/2013 (Basicsmedia) – Bank of America Corp (NYSE:BAC) continues to provide its clients, who mostly include governments and corporations as well as individuals, small and medium sized enterprises with financial services. The main products and services which the bank offers include those geared asset management, investing and banking. It is a top provider of most financial and risk services which it extends to its large base of clients. But there have been too many complaints of late regarding BAC’s ability to continue offering these products and services into the future.

BAC’s Future Prospects Aren’t Bad

It is not lost on analysts and everyone else that the economy has been battered for quite a while now. Banking and financial institutions were among the few ones which got affected the most, and there were fears that the largest of these institutions were on the verge of collapse. Lately, it has been evident that some of these institutions are now back on their feet, or at least they appear to have turned a leaf, from losses to profits. This was clearly shown last year, in 2012, when the banking sector was able to report real value growth by almost 3.6%.



One reason which has been given for BAC’s turn in fortunes is that it has started a campaign which endeavors to manage credits much better than was done a few years ago, prior to the global financial crisis. As long as financial institutions work harder to minimize credit risk, they will be able to enjoy better profits, than they had done up to this point. Banks which ignore the amount of credit risk they take on will suffer from poor financial results which will not be pleasant news to relay to their investors. Higher credit risk reduces yields and profits.

The other reason which has led to an increase in BAC’s turnaround, as well as that of its competitors, is that they are more focused on obtaining revenue from fees. These financial institutions also appreciate the fact that their financial health depends mostly on whether the economic conditions existing around them improve or not. It is obvious that the world has somewhat recovered from the harsh economic times it went through since 2008. The global economy appears to be on a recovery path, and BAC will benefit from the improved conditions.

BAC isn’t entirely on its deathbed as some might have predicted. The bank recently announced that it expects to see more than 260% growth in its earnings at the end of 2013. Furthermore, the bank has announced that it expects to enjoy 49% growth by the end of next year, 2014. This is because the bank has cut down on its expenses, while investing in improving the quality of its assets. As the bank continues to focus its attention on earning income from interests, which currently account for around 46% of its revenue, its profits are likely to keep rising as well.

BAC Shows We Can Still Invest in Large Banks

Therefore, even though the interest in investing in large banks suffered a great deal after the global financial crisis of 2008, things appear to have changed for the better. While I would have been the last one to advice people to invest in large banks such as BAC in the past, due to the hit they took when the financial crisis emerged, I would not make the same recommendation right now. If you have the financial resources, BAC is going to be a great stock to invest in. It has a healthy outlook for the remainder of 2013, which is projected to continue into Q1 of 2014.

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