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As part of its previously announced plan to appoint more than 1,000 small business bankers across the country, Bank of America Corporation (BAC - Analyst Report) reported the recruitment of 138 such bankers in Florida. Of these, 58 bankers were hired in South Florida, 34 in Central Florida, 28 in Gulf Coast and the remaining in North Florida.
BofA’s decision to hire small business bankers throughout the country stems from the fact that small businesses were facing difficulties in obtaining the expertise required for running operations and maintaining finances. Hence, in 2010, the company announced its plan to employ a wide number of such bankers.
Often, small business owners face unique and complex financial demands. To understand the exclusive needs of these small business owners, customized guidance and constant attention of small business bankers are extremely essential. Therefore, BofA is hiring these specialized bankers to tap the huge demand for personalized help in the state.
Through BofA’s small business bankers, small business owners will be able to access local expertise and a dedicated resource that can properly interpret its exclusive needs. Small business bankers will evaluate the business owners’ credit, deposits, payroll and cash management needs besides providing guidance. This, in turn, will enable these businesses to better manage its finances and work more efficiently.
According to BofA, small businesses are critical to the overall development of the economy. In spite of their significant contribution to the economy, these do not have access to better banking facilities. Therefore, the company took such an initiative to sort out the problems faced by small businesses and provide assistance to owners in order to ensure smooth facilitation of their business operations.
According to the U.S. Small Business Administration (SBA), in Florida, there are approximately 2 million small businesses. These businesses account for more than 98% of all employers and employ over 40% of the private-sector workforce. Moreover, almost 75% of the state’s gross domestic product (GDP) comes from these small businesses.
In these efforts, BofA has been constantly pursuing active lending to small-scale firms. In the first half of 2012, the company extended approximately $813.8 million (including $361 million in new originations) in credit to small businesses across Florida.
Much like BofA, JPMorgan Chase & Co. (JPM - Analyst Report) is also trying to accelerate the economic recovery by lending to small businesses. In the first six months of 2012, it provided credit of nearly $10 billion to small businesses and offered loan and raised capital of more than $460 billion for its commercial and consumer clients.
Though BofA is hiring small business bankers, recently The Wall Street Journal reported that the company is planning to layoff nearly 16,000 employees by the end of this year in order to boost its top-line growth. The job cuts are part of its ‘Project New BAC’– the efficiency improvement initiative launched to rationalize its operations and shed non-core assets.
Currently, BofA retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain our long-term ‘Neutral’ recommendation on the stock.