Bank of America Corp. (NYSE: BAC) may have settled on a $16.65 billion fine for mortgage law violations. However, if faces at least one more large lawsuit, customer service problems and pressure on earnings over the next several years.
Bank of America is not past its legal problems, although they are small compared to what they were at the start of the year. It still faces a $1.27 billion judgment on what has become known as the “hustle” mortgage program.
Customer service has plagued the bank and continues to do so. In the J.D. Power 2014 U.S. Retail Banking Satisfaction Study, Bank of America rated at or near the bottom in most regions in which it does business. The study included ratings of banks in 12 geographic regions.
Bank of America also ranked well below its three large rivals — JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC) and Citigroup Inc. (NYSE: C) — in the American Customer Satisfaction Index. Its rating also fell well below the industry average. And in the 24/7 Wall St. Customer Service Hall of Shame, Bank of America ranked at the bottom of all 108 companies measured across all industries in the survey. It has made the “shame” list every year since 2009.
Wall Street has posted less than enthusiastic estimates about Bank of America’s ability to perform well in future quarters. According to data from Yahoo! Finance, Bank of America is expected to lag the industry in most future quarters, with the possible exception of next year. Pessimism about the bank’s future has shown up in its stock price this year. As the S&P 500 has risen 8%, Bank of America’s shares are about 4% higher. As for stock price estimates going forward, according to CNNMoney, the one-year consensus is $18, not much above the current price of $16.
Is Bank of America better off than a year ago? The answer is much better. However, it has a very long way to go to improve its relationships with customers and Wall Street.
READ ALSO: What $16.65 Billion Really Means to Bank of America
Find a Qualified Financial Advisor (Sponsor)
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
