Will Bank Of America Survive?
Bank of America has a terrible 2011. They had to give up a lot of their foreclosures, got bad press because they tried to raise rates on checking and the use of debit cards, and their stock price fell so low that it almost went below $5 a share.
I haven’t been a big fan of Bank of America, and I feel like they brought a lot of these problems on themselves with bad management. I don’t believe they’re too big to fail, but I do believe it would be a tragedy if it did happen.
What’s going on with them lately? First, their stock price finally went back up, not close to the glory days but as of last Friday they were back around $7.29 a share.
They’re going to start offering deals to their consumers and their employees that are along the same type of thing Groupon does, where there will be discounts on services and items, with the caveat that since they pretty much know what you’ve been buying with our debit card they hope to steer you towards things they believe you want.
They’ve started working with some of the people that were hurt by the housing crisis, making deals to help those people stay in their homes, but by doing it they’ve been criticized by some states such as Arizona, who says that the deals are impeding fraud investigations against the bank. That’s because the deals include a non-disclosure agreement that can’t be broken. Yet even with those deals they’ve fallen to the 4th largest mortgage loan organization with no outlook for growth any time soon.
And they’re shaking up some of their leadership, especially in its investment banking area, to try to turn things around. Maybe it’s already working, as there’s conversation from financial analysts that are contemplating when their stock price might reach $10 a share.
So, is Bank of America on the brink of turning things around? It looks like it, but one slip up and they could be the largest bank to ever fail in this country. We should know more about their status in the coming months.