BofA Hires Small Business Bankers - Analyst Blog

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Yesterday, Bank of America Corporation ( BAC ) declared the hiring of 51 small business bankers in England, including 32 in Massachusetts, 14 in Connecticut and the remaining in Rhode Island to offer guidance and counsel to local small business owners.

This hiring is a part of BofA's previously announced plan to hire more than 1,000 small business bankers across the country by mid-2012. Initially the hiring started in the Baltimore-Washington DC, the greater Los Angeles and Dallas.

According to the U.S. Small Business Administration, there are about 594,487 small businesses with less than 500 employees in Massachusetts alone. Of the total, 138,846 are employers who account for about 47.8% of private-sector jobs in the state.

Moreover, small businesses including both employers and non-employers totaled to 97.9% of the state's businesses. Further, in Connecticut and Rhode Island, companies with less than 500 staffs totaled to 400,000.

These small business owners often face unique and complex financial demands. These demands require customized guidance and attention from a small business banker, who can understand their unique needs. Therefore, BofA is hiring small business bankers in order to tap the huge demand for personalized help in the region.

Through a relation with BofA's small business banker, a small business owner will be able to access local expertise and a dedicated resource who properly understands its exclusive needs. The small business banker will evaluate the business owner's credit, deposits, payroll and cash management needs besides providing guidance. This, in turn, will enable these businesses to better manage their finances and run their business more efficiently.

In 2011, BofA extended new originations worth $6.4 billion to small businesses, thereby enhancing new credit to these businesses by 20%. Moreover, the company hired more than 500 small business bankers in 2011.

Further, BofA is increasing its spending to buy product and services from these small companies. In June 2010, the company had pledged to purchase $10 billion worth of product and services from small businesses over the next half decade, with a 5% increase in spending every year.

Additionally, in 2011, BofA had also launched small business charge cards, which significantly help small businesses to control their payment and manage expenses. Apart from these, BofA's efforts to help small businesses also include development of the Advisor Alliance retirement plan platform (serving more than 950,000 people from about 40,000 businesses).

Along the same path with BofA, JPMorgan Chase & Co. ( JPM ) and Wells Fargo & Company ( WFC ) are also trying to accelerate economic recovery by lending to small businesses.

Currently, the shares of BofA retain a Zacks #4 Rank, which translates into a short-term Sell rating. Also, considering the company's fundamental weakness, we have a long-term Underperform recommendation on the stock.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BAC , JPM , WFC

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