Tom Montag President, Global Banking and Markets

Transcription

1 Global l Banking and Markets Tom Montag President, Global Banking and Markets

2 Key Takeaways Our Opportunity New global leader with significant earnings power Merger synergies continue maximizing the value of the universal bank platform Scale to serve all our clients' financial i needs Strong performance across corporate and institutional clients Capital markets powerhouse Closing the gap on key peers Significant investment in senior resources globally Strategic t priorities: iti International Technology Delivering the franchise 1

3 Global Banking and Markets Serves a Broad Range of Bank of America Clients Global Commercial Banking Global Corporate & Investment Banking Global Markets GWIM Commercial Large Corporates Private Equity & Sponsors Municipalities Sovereigns / Government Agencies Financial Asset Pensions & Hedge Institutions Managers Insurance Funds High Net Worth / Family Office Treasury, Trade Finance, Lending, Leasing, Advisory, Debt and Equity Underwriting, Markets (FX, Rates and Commodities Risk Management) Sales & Trading of Equities, Bonds, Loans, Mortgages, FX, Commodities, Derivatives Clients from ~100 countries 10,000+ corporate clients 12,000+ institutional clients Published 40,000+ research reports covering 3,200+ companies in

4 Financial Snapshot Full Year 2010 Global Banking and Markets Business Revenue Mix ($B) Total Revenue, Net of Interest Expense $28.5 Pre-Tax Income 10.6 Net Income 6.3 Total Assets (end of period) Total RWA Basel I (end of period) Tangible Equity (2010 average) Return on Tangible Equity 15.1% Pre-Tax Margin 37.2% Business Lending & Leasing (end of period) Business Deposits (end of period) Sales & Trading ~$17.0B ~60% Investment Banking Fees ~$5.5B ~19% Business Lending & Leasing and Treasury Services ~$6.0B ~21% Employees (end of period) 12, Includes loans held in FVO

5 Competitor Benchmarking BofAML Investment Banking and Sales & Trading Revenue vs. Peers ($B, excludes DVA) GAP Narrowed ($14.8) ($3.8) +$11.0 GAP Narrowed (6.9) (2.9) +$4.0 GAP Erased (7.2) $8.0 LEAD Widened $1.8 4

6 Global Investment Banking 5 Market Leadership 2010 Fee Rankings 1 U.S. Non-U.S. Global Investment Banking Fees (IB) #1 #8 #2 Debt Capital Markets #1 #8 #1 Leveraged Finance #1 #5 #1 Investment Grade #2 #8 #2 Equity Capital Markets #1 #9 #4 M&A #5 #10 #6 Most Innovative Investment Bank from North America Most Innovative Investment Bank for Loans & Leveraged Finance Global Loan House of the Year U.S. High Yield Bond House of the Year Americas Structured Equity House of the Year Most Creative Global Investment Bank (two consecutive years: 10, 11) 1 Dealogic fee estimates 2 Dealogic 3 Includes Managing Directors and Directors for Investment Banking and Capital Markets Global Capabilities World-Class Commitment Only bank ranked in the top 4 to gain IB share in Top 3 in all global industry group IB fees 1 Advisor on >$380B in global M&A transactions 2 Bookrunner on >$560B in global financing volumes 2 Average industry experience of Global Corporate & Investment Banking leadership team 22 years; average BofAML tenure 10 years 78% senior hires outside the U.S. in

7 Strength in U.S. Opportunity in International and M&A Investment Banking Client Fee Share / Rankings 1 BofAML Share #1 Player Global l Investment t Banking Non-U.S. US Investment tbanking 8% 6% 4% 2% 0% 14% 12% 10% 8% 6% 4% 2% 0% 6% 5% 4% 3% 2% #4 #2 #2 #2 #4 #2 1% 0% #7 #9 #5 #7 #9 #2 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 YTD'11 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 YTD'11 U.S. Investment Banking Global M&A 12% 10% 8% 6% 4% 2% #3 #2 #1 #1 #2 #2 0% #4 #8 #6 #5 #8 #4 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 YTD'11 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10YTD' Dealogic fee estimates. YTD as of February 28, 2011

8 Global Corporate Banking Market Leadership 2010 Rankings U.S. Global Overall Corporate Bank 1 #1 Top 5 Loan Syndications Fees 2 #1 #1 Treasury 3 #1 #2 Leasing 4 #1 Top 5 Global Capabilities World-Class Commitment Bookrunner on ~$250B in global loan syndications, up 93% over Funded business lending & leasing of $88B U.S. Large Corporate Banking Quality U.S. Large Corporate Cash Management Quality Best U.S. Cash Management Bank, Large Corporate 10 years running The Asset Triple A Awards Regional Rising Star Cash Management Bank (Asia) Best Trade Bank in North America Deposits of $103B, up 11% over % treasury services penetration of Global Fortune 500 (95% of U.S. Fortune 1,000) 68% senior hires outside the U.S. in ; Head of Global Treasury Solutions expected to join in Q Excludes Custody. Source: independent research provider, independent consultants and internal benchmarking analysis 2 Dealogic 3 Large Corporate and Commercial Clients 2010 treasury revenue as reported by competitor banks Top U.S. Bank-Affiliated Leasing Companies per special issue of Monitor 100 (June, 2010); Global based on internal estimates 5 Includes Managing Directors, Senior Vice Presidents and Directors for Corporate Banking

9 Global Markets Market Leadership U.S. Equity Sales Quality U.S. Foreign Exchange Overall Service Quality U.S. Convertibles Quality Global Capabilities World-Class Commitment Market maker in all major asset classes Primary dealer in 15 countries European Equity Sales Quality #1 Bookrunner of municipal securities 1 European Equity Trading Quality #1 U.S. Convertible Trading Share #1 European Prime Broker #1 Capital Introductions Globally Most Innovative Investment Bank for Prime Brokerage #1 Bookrunner of U.S. asset-backed securities 2 and U.S. mortgage-backed securities 1 Rebuilt EMEA FICC Sales and strengthened Asia; ~40% of FICC Sales generated from International (~35% in 2009) Average industry experience of Global Markets leadership team 22 years; average BofAML tenure 11 years 65% senior hires outside the U.S. in Thomson Reuters 2 Dealogic 3 Includes Managing Directors and Directors for Global Markets

10 Building Product Strength FICC Equities Research 2010 Rank 2010 Rank 2010 Rank AMRS Fixed Income & FX High Grade Corporates & CDS High Yield Corporates & CDS Leveraged Loans Distressed Bonds & Loans Govts & Flow Rate Derivs MBS, ABS & CMBS Money Markets Europe AMRS U.S. High Touch Trading U.S. Electronic Trading N. AMRS Flow Derivatives High Touch Trading Electronic Trading Flow Derivatives n/a n/a n/a Global All-America Equity All-Latin America Equity All-Europe Equity 1 Emerging EMEA Equity All-China Equity All-America Fixed Income All-Europe Fixed Income n/a n/a Repo EM Ext Debt, Local Debt & FX Developed Mkts FX & EM FX Fixed Income & FX Asia Intensive Sales Service High Touch Trading Electronic Trading Flow Derivatives U.S. Equity Analyst Share 2 European Equity Research Share 2 Asia Equity Research Share 5 G10 FX Strategy 9 Rates Strategy U.S. Treasuries 4 High Grade Corporates & CDS 8 Europe Syndicated Loans Govts & Flow Rate Derivs EM Ext Debt, Local Debt & FX Developed Mkts FX & EM FX Global Prime Brokerage Market Share 6 Top 3 Rank 7 Rank Rank Source: independent research studies and league tables

11 Global Research Market Leadership #2 U.S. Equity Analyst Share #2 European Research Equity Share #5 Asia Equity Research Share #1 All-Latin America (Equity) #1 Emerging EMEA (Equity) #3 All-Europe (Equity) #3 All-America (Equity) #4 All-China (Equity) #3 All-America Fixed Income #7 All-Europe Fixed Income Global Capabilities World-Class Commitment Unparalleled Coverage 800+ Analysts Covering: 3,200+ companies, 880+ corporate bond issuers 40+ currencies, 60+ economies, 20+ commodities Expanding Across All Asset Classes and Regions Hired key talent in Rates, Currencies, Mortgages and Emerging g Markets Growth in Middle East, South Africa, Russia and China World-Class Index Platform 5,000+ fixed income bond indices, 500+ investable commodity indices, 175+ theme and sector based equity and equity derivative indices Launching new indices relevant to clients e.g., GFSI, EM corporate credit indices 10 Global Equity Companies Covered ed 1 1 Bank of America Merrill Lynch 3,252 2 JPMorgan 3,193 3 UBS 3,061 4 Goldman Sachs 3,004 5 Deutsche Bank 2,931 1 StarMine reported coverage as of January 1, 2011 BofAML Equity Coverage as a % of Market Cap MSCI All World 85% U.S. S&P % MSCI Europe 89% U.K. FTSE % MSCI Asia Pacific 80% Australia ASX % HK HANG SENG 79% India SENSEX 99% Japan NIKKEI % Taiwan TSEC 50 85%

12 Strategic Priorities International Technology Delivering the Franchise Taking clients around the world: Be Global, Be Great Creating world-class platforms; unified trading and risk systems; global treasury solutions Delivering the full range of products to ALL of the Bank s clients Profitability: Balance risk and growth with rigorous cost discipline 11

13 Significant International Opportunity 1 International International Market Opportunity Regional Revenues 2 Americas BofAML market share >9% ~35% Fee Pool ~65% International BofAML market share <3% 28% 42% 53% Scale: International market fee pool ~65% of global 72% 58% 47% Growth: 85% of GDP growth will be outside the U.S. 3 BofAML US U.S. Peer US U.S. Peer addressable fee pool. Source: independent consultants and internal analysis 2 From company reports 3 International Monetary Fund Note: Americas represents U.S., Canada and LatAm

14 1 International Global Footprint International Locations Broker-Dealer Bank Branch 4 Our extensive broker-dealer and bank branch network provides a global footprint to serve our clients around the world 13

15 International Commitment 1 International Our clients are Global, think Globally and invest Globally People Platform Clients >900 International Hires in 2010 Regional Construct: Asia Pacific, Emerging g Markets ex-asia, Europe New Leaders since 2010: President of Emerging Markets ex-asia Head of Sales & Trading, Emerging Markets ex-asia Head of Global Corporate & Investment Banking, Asia Pacific 1 Head of Sovereign Wealth Fund Coverage New Country / Regional Leaders: India, Mexico, Russia, Saudi Arabia, Southern Africa, South East Asia, Southern Cone, Turkey Product Leadership: Head of Investment Banking, EMEA Head of Corporate Banking, Emerging Markets ex-asia Head of Corporate Banking, Asia Pacific; Head of GTS, Asia Pacific Head of Corporate Banking, China; Head of M&A, China Head of Investment Banking, LatAm ex-brazil Head of Sales & Trading, South Africa Presence: ~40 countries worldwide New Licenses: Brazil Bank License, Saudi Arabia Broker-Dealer License Global Funded Loan Balances 2 : International $29B in 2010 (up 35%) vs. U.S. / Canada at $24B New Revenue Generating Clients in 2010: ~400 GCIB clients; ~65% international 14 1 Expected to join in Q Funded Loans include Core Loans, FVO, Trade Loans, Overdrafts; exclude Leasing

16 Loan Balances 1 International Loan Balances 1 by Region Global l Binding Commitments t $219.0 $ Global Funded $53.9 $52.8 ($B) Total: -6% Funded: -27% International Loan Growth Total: +8% Funded: -5% Total: Funded: +25% +35% Total: Funded: +65% +79% Unfunded Loans and Contingent Exposure Total Funded: +47% +61% Funded Loans U.S. / Canada International EMEA Asia LatAm 15 1 Funded Loans include Core Loans, FVO, Trade Loans, Overdrafts; exclude Leasing. Legally Binding Commitments include Funded Loans, Unfunded Loans, Contingent Exposure (LCs and Unfunded BAs) and facilities held under FVO

17 International Successes in International Largest Japanese IPO Since 98: $11.1B Largest Ever Follow-On Globally: $70.0B Largest Ever Korean IPO: $4.4B Largest Ever Brazilian Bank Follow-On: $5.4B Largest European M&A and Largest German Corporate Largest Asia Pacific LBO Largest Euro Denominated Follow-On Since 00: $5.6B Loan Since Jan 08: $2.8B M&A Financing in 10: $5.7B At-Market Rights Issue 2 nd Largest Ever Australian IPO: $4.0B Largest Ever FIG IPO in the Nordic Region: $2.0B Largest Ever Indian Corporate Bond: $1.5B Largest Ever Liability Management Transaction Undertaken by a European Financial Institution: $9.5B Largest Australian M&A Deal in 10: $9.9B Largest Russian IPO and First Ever HK IPO of a Russian Company: $2.6B Largest Ever Energy, Power Largest Ever Cross-Border First Ever Chinese Bank & Utilities Rights Issue in European into Americas Media & A and H Rights Offering: the UK: $48B $4.8B Telecom M&A Deal: $9.7B $3.2B Bank of America Becomes Bank of Asia as Deals Resume Dec

18 Technology is Enabling Growth 2 Technology Investments are being made to streamline our Technology & Operations infrastructure Prior State Current State Future State ~2,000 applications 1,000+ applications 100s of applications 500+ databases for positions and risk 100s of databases for positions and risk 1 database for positions and risk 100+ trading systems 50+ trading systems 1 trading system Multiple sets of market data Multiple sets of market data Single repository for market data 17

19 Technology Strategy 2 Technology Superior Technology Solutions e Defens World-Class Risk Management Integrated cross-asset, front-to-back to pricing and risk management Straight-through processing with real time events and downstream accounting computations Fully Integrated Client Portal Multi-product, single dealer on-line trading Cross-product research, analytics, market data and post trade services Mobile access to investment recommendations Off fense State of the Art Electronic Trading Platform Global, Multi- Channel Access for Corporate Clients via CashPro Single platform experience for execution across cash, options, swaps, futures and FX Linking cross-product utility functions: connectivity, product development, servicing and on-boarding Product specific expertise: pricing, risk and analytics Single sign-on access to treasury, debt, liquidity and investment solutions 18

20 Global Commercial Banking 3 Delivering the Franchise Global Banking and Markets 2010 Results 1 >$900MM in revenues Opportunity & Focus Dual Coverage delivering leading Investment Banking and Global Markets capabilities to extensive middle-market client base ~60% revenue growth Optimize coverage of ~2,000 Dual Covered Clients Global Commercial Banking 14% IB market share 2 Intensive focus on cross-sell of Global Markets products (FX, Rates, Commodities, etc.) results for Dual Covered Clients 2 Dealogic fee estimates

21 Global Wealth & Investment Management 3 Delivering the Franchise Global Banking and Markets 2010 Results ~1,800 two-way referrals Opportunity & Focus Strong partnership with increasing referral flows >40% increase in GBAM revenues GBAM Benefit Market-Linked Investments operates as a JV between GBAM and GWIM and has the #1 market share in U.S. Structured Notes 1 Global Wealth & Investment Management ~$4.5B in new asset wins for GWIM GBAM's #1 underwriting position in municipal securities 2 provides a source of investments for our GWIM client base 20 1 From publicly available SEC filings 2 Thomson Reuters

22 Regulatory Environment Changing regulatory environment will reset the competitive landscape Customer-driven focus is a key competitive advantage Opportunities in clearing, collateral management and cross-margining Less impact from Volcker Rule Increased liquidity and velocity of balance sheet OTC derivatives regulation will significantly impact trading volumes, clearing and collateral management Estimated 60-80% 1 of OTC derivatives could be centrally cleared Increased derivatives volumes would mitigate revenue impact of new regulations Capital, margin and territorial scope of Dodd-Frank are key unknowns Prepared for regulatory change Global Futures & Derivatives Clearing Services business launched in 2010 offering clients clearing, collateral management and cross-margining services Began wind-down of Global Proprietary Trading business in 2010 Headcount reduced by ~75%. Balance sheet reduced by over $6.6B Mitigating impact of Basel II MRA and Basel III on RWA Reducing higher RWA positions Optimizing models Addressing counterparty and CVA exposures 21 1 Based on external research

23 Long Term Goals Key Drivers Economic Growth International / Emerging g Markets Liquidity / Credit Equity Markets Mid-to-high single digit revenue growth Mix of stable and variable revenue Significant opportunity for international revenue growth Focus on profitability Delivering g the Franchise Sovereign Risk Return on Tangible Equity 15%+ Regulatory Environment 22

24 Key Takeaways Our Opportunity New global leader with significant earnings power Merger synergies continue maximizing the value of the universal bank platform Scale to serve all our clients' financial i needs Strong performance across corporate and institutional clients Capital markets powerhouse Closing the gap on key peers Significant investment in senior resources globally Strategic t priorities: iti International Technology Delivering the franchise 23

25 Bank of America 2011 Investor Conference