EXHIBIT 99.2
July 28, 2000
Contact:
Investors: Susan Carr (704) 386-8059
Kevin Stitt (704) 386-5667
Media: Bob Stickler (704) 386-8465
Bank of America Announces Investment, Productivity Initiatives
CHARLOTTE, July 28, 2000 -- Bank of America today outlined a series of
productivity and investment initiatives designed to strengthen revenue growth,
support earnings momentum and improve the experience that customers have
whenever and wherever they touch the company.
As part of these initiatives, the company will eliminate between 9,000 and
10,000 positions mostly during the next 12 months, in order to reallocate
resources. The principal focus of these reductions will be in middle and senior
management and positions eliminated as a result of process improvements. These
reductions will take place across the company's franchise. The company now
employs about 150,000 people.
"We have been saying for some time that our days of growth by merger and
acquisition are behind us," said Chairman and Chief Executive Officer Hugh L.
McColl, Jr. "For the most part, our merger transition work also is behind us. We
have successfully built a company with unlimited potential. To date, despite our
many successes in individual businesses, we have not made the degree of progress
we would like toward realizing that potential. We've assembled the right parts,
but after years of additions, our resulting structure is neither as efficient,
nor as effective as it needs to be. We're going to fix it in order to take
advantage of our revenue opportunities."
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"Our challenge now is to shape this organization, taking full advantage of what
we've created in order to deliver superior value for our customers and
shareholders," said President and Chief Operating Officer Kenneth D. Lewis.
"That means investing capital wisely. It means working smarter, organizing
around customers and tailoring our products to meet their needs." To that end,
Lewis said the company plans a number of investment initiatives to support its
best growth opportunities. Examples include:
o Directing an additional $70 million for e-commerce initiatives during the next
six months.
o Accelerating the introduction of Internet technologies into banking offices
and call centers.
o Investing in asset management, including opening 10 private banking offices in
high-potential markets such as California.
o Accelerating investments in the card and payment businesses.
o Investing $25 million more this year than planned for brand development.
o Speeding up development of the investment banking platform in the United
States, Europe and Asia.
Lewis also announced steps to boost productivity. First, he said, the company
intends to eliminate management layers, giving top executives more direct
responsibility for customer service. Second, it will overhaul processes and
organizational structures to simplify and expedite banking transactions for
customers and deliver financial solutions that lead to profitable relationships.
These changes, which are still being designed, could affect everything from
credit underwriting procedures to call center technology and are heavily
weighted toward enhancing revenue growth.
"Today's initiatives are a good start," Lewis said. "Each year, we plan to
improve productivity and reallocate the savings for customer service initiatives
and revenue growth opportunities. Improving performance, investing in new
technologies and finding better ways of serving the customer are never-ending
challenges."
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Vice Chairman and Chief Financial Officer James H. Hance, Jr. said the company
plans to take a charge of $300-350 million after-tax in the third quarter,
primarily to cover severance costs related to the initiatives announced today.
Productivity gains are expected to pay for severance and other related costs in
approximately one year.
Hance added that a substantial portion of these savings will be earmarked for
reinvestment. He reiterated the company's expectation of 12 to 15 percent
operating earnings per share growth in 2000 and 2001, assuming no significant
economic slowdown.
Bank of America is the largest bank in the United States. With full-service
operations in 21 states and the District of Columbia, it provides financial
products and services to 30 million households and two million businesses. The
bank also supports business transactions in 190 countries. The company's common
stock (ticker: BAC) is listed on the New York, Pacific and London stock
exchanges. Certain shares also are listed on the Tokyo Stock Exchange.
www.bankofamerica.com
Forward Looking Statements
This press release contains forward-looking statements with respect to the
operations of Bank of America, including, without limitation, statements
relating to the earnings outlook of the company. These forward-looking
statements involve certain risks and uncertainties. Factors that may cause
actual results to differ materially from those contemplated by such
forward-looking statements include, among others, the following possibilities:
(1) projected business increases following process changes and productivity and
other investments are lower than expected or do not pay for severance or other
related costs as quickly as anticipated; (2) competitive pressure among
financial services companies increases significantly; (3) costs or difficulties
related to the integration of acquisitions are greater than expected; (4)
general economic conditions, internationally, nationally or in the states in
which the company does business, are less favorable than expected, (5) changes
in the interest rate environment reduce interest margins and affect funding
sources; (6) changes in market rates and prices may adversely affect the value
of financial products; and (7) legislation or regulatory requirements or changes
adversely affect the businesses in which the company is engaged.
