Tomahawk, WI 8/26/2013 (BasicsMedia) – As a bank and financial holding company, Bank of America Corp (NYSE:BAC) serves a wide range of clients, with diversified products. It remains the second largest banking institution in the U.S, second only to JPMorgan Chase, and ahead of Citigroup in terms of total asset base. There was a time when this was one of the most popular banks in the U.S and beyond, but this seems to have changed. The changing scenario has been brought about as a result of the financial crisis of 2008, from which many large banking and financial holding institutions are yet to recover. How will its results in 2013 compare with 2012?


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BAC’s Market Cap is Still Intact

Currently, BAC has close to 10.74 billion outstanding shares, which represent a market capitalization of around $156.53 billion. With such a massive market cap, one would expect that this is a company which does very well on all fronts. However, it has been accused of breach of conduct in many instances. It has fallen victim to what is generally considered to be bad working environment being experienced by workers in large banks when one of its interns died while working in its London branch. This is the sort of perception or allegation which BAC can do without at a time when it needs to put its affairs in order.

However, if there is one thing which has been working in its favor, is the fact that BAC is considered to be one of the most helpful financial institutions to underdeveloped communities. It has offered financial assistance to a number of these communities across many nations, and not just in the U.S alone. Small business owners also have a great appreciation for this bank, and they covet it a lot. Small bu8siness owners love this bank because it helps them to secure credit as well as other financial solutions they are in need of. BAC can milk these two situations and reap a lot from them to make it attractive to investors.

BAC’s Market Cap is Adequate Protection

BAC doesn’t have a bleak future, not when it boasts of market cap to the tune of $156.53 billion, and still enjoys goodwill from small business owners. Over the last one year, BAC stock has gained by more than 75%. Even with this not too gloomy outlook, investors opt to be bearish when trading Bank of America stock. They expect that the 75% rise in BAC shares will not be maintained over a much longer period of time. Therefore, they don’t expect 2013 to be the year when BAC outperforms the results it posted in 2012 in every aspect. There is too much pessimism regarding BAC stock for positive results to be noted.

In the days past, banks would normally make a lot of money and increase their profit margins whenever the interest rates were high. At the moment, interest rates appear to be on the increase, but there is a lot of pessimism as to whether this is enough to help out large banks such as BAC. I would give the bank around 3-4 years to finally be back on its feet, and enjoy a much healthier financial base fm which to operate. In the meantime, I join with the investors’ bearish approach to Bank of America stock.

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