Bank of America Corporation (BAC) recently stated that the company has hired 110 small business bankers in the Greater Los Angeles area. This is a part of the company’s previously announced plan to hire more than 1,000 small business bankers across the country this year.
Additionally, BofA also commented that more 70 small business bankers will be hired in Southern California and 21 in the San Fernando Valley by the end of this year. Los Angeles, Dallas and the Baltimore-Washington, DC area were the first three markets where hiring started.
To oversee and manage the hiring, BofA appointed Lynn Fernandez as Small Business Banker executive for the Pacific Southwest region, including Los Angeles. In this role, she will supervise the small business banker sales force.
There are more than 49,000 small businesses throughout the Los Angeles region, according to the California Employment Development Department. These small business owners often face unique and complex financial demands. Hence, 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 and cash management needs besides providing guidance. This will enable these businesses to manage their finances in a better way and run their business more efficiently.
During 2010, BofA extended credit worth $18 billion to small businesses compared with $16.5 billion in 2009. This is a part of the ongoing commitment made by the company. Since August 2010, the company has provided $10 million in grants to nonprofit lenders to access federal micro lending capital.
In June last year, BofA had announced that it will increase its spending on small and medium-sized and diverse businesses. The company pledged to buy $10 billion of product and services from these companies over the next half-decade, with a 5% increase in spending every year.
Apart from these, BofA’s efforts to help small businesses include improvements in the company’s small business credit cards (such as no penalty rate hike) and development of the Advisor AllianceTM retirement plan platform (serving more than 900,000 people from about 40,000 businesses).
Apart from BofA, JPMorgan Chase & Co. (JPM) is also committed to help small businesses. During 2010, the company continued to contribute to the economic recovery of small businesses. The efforts included more than $10 billion of credit provided to over 250,000 small businesses, an increase of more than 50% over 2009.
Though BofA is poised to benefit from its large scale operations, prudent capital management, non-core asset shedding and improving credit quality, concerns related to rising expenses, pressure on net interest yield and limited claim experience for non- government-sponsored enterprise (GSEs) will resist bottom-line expansion in the near term. However, the latest hiring spree will enable the company to provide assistance to these small businesses and would enable the company to improve its top line.
Currently, BofA retains a Zacks # 5 Rank, which translates into a short-term ‘Strong Sell’ rating.
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