Chart: Bank of America's Biggest International Exposure


The domestic economy has made significant progress over the past year. Housing appears poised to continue its recovery -- though challenges remain -- and the unemployment rate recently dropped below 8% for the first time since 2009.

Multiple economic threats nevertheless loom on the international horizon. While China's economy has averted a hard landing for the time being, its remains in a fragile state. And Europe continues its collision course with inevitability -- be it complete economic and political integration or fracture.

It's for this reason that investors should be knowledgeable of the country's that most impact the companies their invested in. With this in mind, I constructed the following chart revealing the top 10 countries that Bank of America is financially exposed to.

Source: Bank of America's Supplemental 4Q12 Financial Information. Note: the dark blue represents hedges and credit default protection, and the light blue illustrates the net exposure. The number on top of each bar is the gross exposure.

Bank of America does the lion's share of its international business with so-called developed countries such as the United Kingdom, Japan, and Canada. As an interesting side note, however, in the fourth quarter of last year, the bank cut its net exposure to Germany in more than half, going from roughly $23 billion at the end of September down to $11 billion today.

While these figures seem significant, like the $50-billion exposure to the United Kingdom, it's my opinion that they don't represent a robust threat to Bank of America's viability. Under CEO Brian Monyihan's leadership, the nation's second largest bank by assets has aggressively sought to reduce and de-risk its balance sheet around its core operations -- all of which reside in the United States.

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