Introduction
Employees tend to acquire an interest in companies that realize high-profit margins and stability in their performance. These attributes are thought to influence their motivation and attitude towards the company they intend to work for. Studies have shown that employees tend to focus on aspects such as working hours, benefits offered by company culture, company stability, and opportunities for growth before settling on the company they wish to hire. Currently, the majority of the employees are analyzing company performance and stability to avoid future redundancies that will result in layoffs (SWOT Analysis of Truist Bank of America, 2021).
This report aims at analyzing and comparing the attractiveness of Truist Bank and Bank of America from a prospective employee’s point of view. This objective, informal critical analysis, will compare these companies and determine the suitable one for an employee. The paper will also evaluate each company’s size, history, market position, competition advantages, financial stability, corporate culture, and reasons not to work for the companies.
Size and History
The Truist Financial corporation is a large company that started in 1906. The company is now 114 years old and is well-established in the United States. The company provides its banking services in the Southeastern and Mid-Atlantic United States areas. The company has its headquarters in Georgia state and was started by Thomas Jefferson and Alpheus Branch. The company began as a small chain banking company owned locally and operated by locals from Georgia. The company has experienced various challenges during its formation, such as increased competition, changing business models, and customer retention. The significant events that significantly impacted the company were the crash in the stock market and the difficulty in acquiring a charter.
On the other hand, Bank of America is a medium-sized American bank that provides international banking, finance, and investment banking services. The company began in 1998 and is currently 23 years old. Currently, the bank has more than 500 000 employees and is being managed in London, where they have established its headquarters. The bank was formed in 1998 by Amadeo Peter Giannini after he acquired the NationsBank shares (SWOT Analysis of Bank of America, 2021).
Currently, it is the second leading bank in America by market capitalization after the famous J.P. Morgan and the largest in terms of bank shares. During its formation, the company experienced many challenges, such as increased competition, outdated mobile experiences, and security breaches. The significant events that significantly impacted the company include a crash in the stock market during the 2008 period.
Market Position/Growth Potential
Having been established in 1906, Truist bank is one of the leading banking companies in the United States, thus being a national leader in the market. According to a past meta-analysis by Barner (2016), The Truist Bank had opened nearly 36 branches as of 31 December 2012, with the number being projected to rise in the subsequent years. Their SWOT analysis of 2020 revealed that the company has a rigid non-interest earning base with a vast branch Network among the third generation Banks (SWOT Analysis of Bank of America, 2021).
In addition, they have a lower infection in loan exposure and a comprehensive product line, thus making them acquire a competitive advantage over their competitors in the global market (Arachchige & Robertson, 2017). The company has a well-functioning top management organ that has contributed significantly to its growth and development.
On the other hand, Bank of America, compared to Truist Bank, has a higher market position that enables them to become a leader in the United States banking industry. The company has established nearly 40 branches in different countries and a more extensive customer base of about 46 million customers. The company realizes a net income of over 27.43 billion US Dollars annually with over 208000 employees who are well-trained and developed to improve their working skills. In terms of growth potential, Bank of America has established varied innovative products and services that guarantee them a competitive advantage in the global market, unlike Truist Bank (Arachchige & Robertson, 2017).
For instance, they have established product development and utilization of the already spiked internet-based operation to innovate new products and services. Truist Bank has a lower infection in loan exposure and a comprehensive product line, thus acquiring a competitive advantage over its competitors in the global market. The company has a well-functioning top management organ that has contributed significantly to its growth and development.
Ability to Compete
In the case of Truist Bank, the company has received high competition from other companies despite the establishment of a competitive advantage environment in the United States. The critical competitors for Truist Bank are Hunting Bancshares, Wes Banco, Frost Bank, United Bank, Bank of America, and Peoples Bancorp Inc (Barner, 2016). In addition, both Truist Bank and Bank of America are direct competitors in the United States banking market. The Bank of America banking companies’ competitors also offers artificial intelligence services that have helped protect customers’ Money. The primary industry for both companies is established within the banking sector, whereby each of the companies has established a compelling performance to acquire a competitive advantage over the others.
On the other hand, the critical competitors for Bank of America include JPMorgan Chase, US Bancorp, Truist Financial, Hunting Bancshares, Wes Banco, Frost Bank, United Bank, and Peoples Bancorp Inc. The Bank of America banking companies’ competitors also offers artificial intelligence services that have helped protect customers’ Money. The competitors also offer innovative services such as ongoing digital transformation through the establishment of the FinTech revolution that had led to a boost in Artificial intelligence and robotics, thus making a rethink in the concept of Money.
However, Bank of America has invested in incorporating innovative services in their service delivery which has made them acquire a higher market position than their immediate competitors (SWOT Analysis of Bank of America, 2021). The company has adopted an ongoing digital transformation by establishing the FinTech revolution that had led to a boost in artificial intelligence and robotics.
Financial Analysis
According to financial analysis, Barner, Truist Financial corporation is widely known for its prowess in trading at 29.3% below its estimate of its optimal share value, with its earnings being forecasted to grow by over 5.1% annually (Barner, 2016). Stocks in Truist Company are currently being highly valued at a percentage value of about 6.7% compared to other companies. Additionally, the Truist Bank of America has had its earnings growing tremendously by over 56.8 over the past five years while paying its employees a reliable dividend of about 3.02% (Lynch & Morgan, 2017).
The company’s current share price is US$63.55 with a beta value of 1.3, thus suggesting that the company is profitable though projected to fail. According to their CEO’s comment on the company’s state, it was revealed that the company has a shareholder return of -1.8% in the TFC, -0.006% in the US Banks, and 0.3% in the US market. However, this company is not a potential takeover target as it has formulated strategies to enable them to remain relevant in the market.
Compared to Truist Bank, an analyst in the Bank of America has indicated that the company’s revenues have grown by over 11.95% over the past five years, with the company as compared to Trust’s, which is 10.94% (Lynch & Morgan, 2017). Stocks in this company are highly valued at a percentage value of 3.9% compared to Truist Bank. In the past five years, the company’s stock performance was 47.08 percent thus showing that the company is fully financially stable. According to their CEO’s comment on the company’s state, it was revealed that the company has a shareholder return of 0.8% in the TFC, 0.16% in the US Banks, and 0.9% in the US market. Bank of America is a profitable company that is not a potential target for takeover due to the high level of management in the company.
Company Culture
Unlike Truist Bank, the Bank of America has a well-established company culture whereby it offers its employees unique and excellent education opportunities, flexible working hours, and travel demands. In addition, their values/mission statement dictates a focus on both customer and employee centricity, an attribute that sets them apart from their immediate competitors. There are no public measurements of employee satisfaction within Truist Bank. Still, in the case of Bank of America, the company has set up an excellent form of evaluating employee satisfaction rates for recognizing employee satisfaction levels (Arachchige & Robertson, 2017).
Bank of America also offers unique employee benefits such as education opportunities for development and travel demands to other banks to acquire skills. In addition, Truist bank is associated with many union issues, unlike Bank of America, which makes most of the employees consider making applications to Bank of America (Barner, 2016). However, Truist Bank has formulated an adequate pension and retirement plan that outdo most of its competitors.
Reasons NOT to Work for each Company
Truist bank has many reasons to prompt employees to reconsider not applying for employment opportunities from the deep analysis. For instance, the company is located in the Southeastern and Mid-Atlantic United States, associated with high living costs and fewer branches. In addition, it is associated with occasional layoffs, sexual discrimination, product recalls, poor community engagement issues, and negative publicity which are vital aspects considered by employees in their quest to acquire employment opportunities in organizations (Arachchige & Robertson, 2017).
In addition, studies have shown that the company pays poor wages to their employees who are discriminated treated. However, despite being associated with a good employee working environment, Bank of America has some limitations for potential employees. These entail poor employee turnover rate and over-centricity on employee development rather than company well-being. In addition, Bank of America has significant product recalls that make many of its employees reconsider their decision.
Conclusion/Recommendations
In conclusion, employees will often analyze every company’s stability and profitability to establish their attractiveness as potential employees. From this critical analysis that has compared the stability, financial situation, culture, and market position, the recommended company is Bank of America. This report has illustrated that an employee may consider working in the Bank of America as Truist Bank is associated with many cases of poor employee treatment.
References
Arachchige, B. J., & Robertson, A. (2017). Business Student Perceptions of a Preferred Employer: A study Identifying Determinants of Employer Branding. IUP Journal of Brand Management, 8(3).
Barner, C. (2016). Truist Bank Analysis. Sage.
Lynch, B. M., & Morgan, C. L. J. (2017). Bank of America, NA. Web.
SWOT Analysis of Bank of America. (2021). Web.
SWOT Analysis of Truist Bank of America. (2021). Web.