Bank of America Corp. beat back one of the major beefs against online banking and electronic commerce by claiming that its investments in those areas have turned a profit., the unit that develops banking, e-payment, and other Web products and services for consumer, small-business, and corporate customers, is “in the black,” said Mark Argosh, consumer and small-business executive for e-commerce.

The pronouncement puts the Charlotte, N.C., company at odds with most banking companies, which have resigned themselves to delaying online profits. Most are struggling to support new electronic channels while maintaining traditional methods to which consumers have clung.

B of A would join a select group, including Wells Fargo & Co., that have achieved or are close to achieving profitability in Web banking. Like Wells, Bank of America has benefited from the critical mass gained through an early lead in Internet banking.

But Mr. Argosh said his company’s knack for building partnerships and investing in technology firms has also helped it overcome its online investment burden.

“We form partnerships to increase speed and create innovative products,” he said Thursday during his speech at the annual meeting of the Bank and Financial Analysts Association. As a result, development costs “will remain at a steady spend level over the next couple of years” and be “a little lower than our peers’.”

Bank of America says its investments in companies whose technology it uses — such as Checkfree Corp., 724 Solutions Inc., and BroadVision — have had big dividends. Mr. Argosh’s presentation included a chart showing that the company’s equity gains from these investments between 1999 and 2001 nearly approached’s development costs.

Mr. Argosh said the company is actively managing its technology portfolio, so it is “low-risk” despite the Nasdaq’s decline. One benefit the companies in the portfolio automatically reap is the “solid foundation” of a relationship with Bank of America, he said. “We are the real proof of concept for these companies.”

Account growth is expected to continue. Mr. Argosh predicted the company’s online retail customer base would grow 61.3% by yearend, to five million, or 33% of its total checking account customers, and the number of customers paying bills online would double, to 1.5 million. The small-business customer base should grow 50%, to 300,000, he said.

Because of the account growth, “we are seeing operating costs per customer decline as growth in development remains pretty flat,” Mr. Argosh said. Revenues are being generated through the higher balances, better retention, and increased cross-selling ratios of online customers.

Bank of America is using ever-increasing Web functionality and personalization to draw customers to its site, he said. “We have had next to no dedicated marketing costs, and I expect that in the next 24 months we will maintain those trends.”

George Bicher, managing director of Deutsche Banc Alex. Brown, said he was surprised to hear Mr. Argosh’s claim of profitability for “It points to the fact these larger companies are spreading their technology cost through a larger user base,” he said. “Smaller companies have to spend the same amount of money, but they don’t have the scale.”

Mr. Argosh previewed additions that B of A hopes will reel in more Web customers. On April 1 it plans to introduce Home Solutions, which will help users find homes, financing, and closing, moving, and home improvement services.

It also plans to begin offering check imaging to all its customers this year, and says a test of the service in Georgia cut processing costs 30%.

Finally, a Web portal for corporate customers is to get a full rollout in June. The company has three other such sites targeting consumers, small businesses, and employees.

Bank of America’s goal is to make its Web site so customizable that “customers will be able to make their own bank,” much like customers of Dell create their own computers, Mr. Argosh said.

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