(FORTUNE Magazine) – When Maria Hijar left her family's white cement-block house in a bean-growing mountain village in Mexico for a tiny flat near Los Angeles ten years ago, she promised her mother and nine siblings that she would send money back. Every month, Hijar would ride the metro an hour to a cut-rate shop in central L.A., then stand in line for another hour for the privilege of paying up to $35 per remittance. The ordeal was similar in Mexico, where her sister Maria Merced would bump three hours by dusty bus to the city of Puebla, collect the funds at a bank, then rumble three hours home. Muses Hijar, 43: "The whole process was taking an 'eye from my face!'"

Then, last fall, Hijar's friends started buzzing about SafeSend, a new money-transfer product from the Bank of America. Hijar signed up. Now, instead of chasing the metro after a long week of cleaning houses, she grabs the phone and punches buttons to transfer, say, $700 from her checking account to her SafeSend account. Bank of America zips the money to a special account that can be accessed by 20,000 ATMs across Mexico. Back home, her sister carries a SafeSend card that BofA sent to the family casa via DHL. She travels 15 minutes to the nearest ATM and withdraws the $700 in pesos. Cost of the transaction: $10. "This changed my life, and saved my family all kinds of aggravation," says Hijar.

Call it the Americanization of Maria Hijar's finances. Instead of carrying cash, she deposits her earnings in the bank. Her confidence and financial sophistication are growing. She now pays her bills by check and says that "SafeSend is so convenient, I'm thinking about a credit card."

Maria Hijar epitomizes the new face of banking. America's 39-million-strong population of Hispanics (two-thirds of them of Mexican origin) is young and growing fast. Many are in their prime earning years. And while new arrivals are often unaccustomed to practices like mortgages and checking, their need for them is still acute. Bank of America, which dominates the Sunbelt, senses a big opportunity. "We expect to get no less than 80% of our future growth in retail banking from the Hispanic market," declares CEO Ken Lewis, 56. To get there, it is doing things like stocking its branches with Spanish-speaking tellers and learning to write mortgages secured by the credit of an extended family. The efforts are paying off. "Of all the banks, it is BofA that dominates the Hispanic market," says David Hendler, an analyst with CreditSights.

Bank of America is a megabank, whose $45.7 billion in revenues last year made it second in size only to Citigroup in the U.S. Unlike Citigroup, though, it isn't interested in spanning the globe, and unlike other megabanks, such as J.P. Morgan Chase or Credit Suisse, it's placing relatively small bets on investment banking and asset management. Instead, BofA gets two-thirds of its revenues from retail, doing old-fashioned stuff like remittances and car loans. Lewis's Holy Grail is doing banking's small tasks faster, better, cheaper. He's even installed Six Sigma, a quality-control process usually used in factories, to reduce errors on mortgage applications and credit card collections. "You can almost picture him, tools in hand, building his model, brick by brick," says Prudential's Mike Mayo in a recent report. "Bank of America represents traditional banking done better."

Lewis is not a colorful man, but his eyes gleam when the talk turns to retail. "In retail banking, you get cheap funds, and you can extend more and more products through the same branch network," he says. "It's a great business." Last year, although the economy was less than stellar, BofA's retail revenues rose 11% and earnings 25%.

Investment banking, where the bank has had big write-downs from risky bubble-era corporate loans, has not done nearly as well. And as with everyone else, BofA's private equity and asset management businesses are also suffering. The company makes a ton of money--last year, $9.2 billion. The problem is growth. Gross revenues fell an average of 10% in 2001 and 2002; after net interest is accounted for (BofA's standard), they rose 3% a year. EPS, after adjusting for accounting changes and costs related to leaving businesses, rose 8% per year. In both cases, the numbers are short of Lewis's targets.

To reach the next level, Lewis is molding a boring-is-beautiful style that is a world removed from the gunslinging flair of his predecessor, Hugh McColl. A flamboyant expansionist who built NationsBank of Charlotte with a dizzying string of acquisitions, culminating in the merger with BankAmerica in 1998, McColl embraced big deals, huge risks, and zigzagging earnings.

Lewis hates all three. As he sees it, BofA can become a superstar by being relentlessly dull. That means improving margins on the retail side, while reducing the risks on the corporate side. A veteran with 34 years at the bank (the last 17 in retail), Lewis rose to the top job in 2000 by doing the gritty work that made McColl's deals pay off. "I'd say to Ken, 'When can you move to Florida to integrate the troops?'" recalls McColl. "And he'd say, 'I can move when I leave your office.'" McColl admires one overriding trait: "Ken always made money."

Lewis believes in numbers-driven, back-to-basics management. It's a lot like his plodding style on the tennis court, where he drives opponents nuts by getting everything back, with metronomic efficiency. Or his taste in food. Take Lewis out, says friend Dennis Thompson, a restaurant entrepreneur, and he orders "steak, steak, and more steak."

What makes Lewis worth watching--or even having dinner with--is the breadth of his ambitions. Lots of banks make money from retail; he wants to be the first full-service one to do so nationwide. BofA operates in 21 states, ranking first in California, Florida, and Maryland, and second or third in Texas, Arizona, North Carolina, and Georgia. It is poised to go into New York and Massachusetts. It has more than 4,208 branches (and 30 million customers), almost a thousand more than second place Wachovia and five times as many as Citi. Lewis believes he can build a national banking brand, then use it to roll out new products to a coast-to-coast clientele. Can it work? Well, investors are intrigued: BofA has racked up a total return of 64% since the start of 2001, the best performance of any major bank or brokerage.

Still, Lewis is dissatisfied. He wants overall revenues to increase 6% to 9% a year, and earnings per share to consistently climb 10% to 12%. To his chagrin, that hasn't happened. As Lewis sees it, those numbers are ambitious but doable. If GDP rises by its historical average of 3.5% a year, and inflation is 2%, Bank of America starts with a baseline of 5.5% expansion. But remember the Hispanic factor--BofA's markets are growing far faster than the overall economy. And its powerful national brand should gradually take market share. Game, set, and match to BofA.

If all this sounds like a bean-counter's fantasy, keep in mind that the bank's retail operations are already making the numbers (and then some); it is the corporate side that has been the drag. Not surprisingly, Lewis has a plan. In investment banking, his strategy is a carryover from his methodical approach to retail. Instead of spending heavily to woo new clients, Lewis is striving to win extra business from existing customers like Baxter International and General Mills. Results have been mixed: BofA has gained market share, but the general decline in investment-banking means profits and revenues are down.

However things shake out in the corporate sphere, Lewis's focus--and heart--will stay on the retail side. The beauty of retail is that banks can fund part or all of their loans with their own deposits, usually at a far lower cost than borrowing on the debt markets. Every dollar that BofA lends--a portfolio of $336 billion--flows from deposits. No less than 30% of those deposits--the $110 billion parked in checking accounts--is in effect a free loan, because the law bans banks from paying interest on demand deposits. Counting CDs, savings, and NOW accounts, Bank of America pays less than 1.5% on its deposits. It's lending more than half of that money to retail customers at an average of just over 7% in interest.

And the masses are great risks. Bank of America's customers default on fewer than 1% of their loans, versus more than 2% for large corporations. All told, BofA pockets 4.6 cents in revenue for every dollar in retail loans, plus another 1.8 cents in fees. Last year, retail banking, plus lending to small and midsized companies, earned BofA $6.1 billion, a 24% return. An improving economy will burnish even those gaudy numbers. In a recovery, the rates banks charge on mortgages and card loans rise faster than the rates they pay on deposits.

The retail model is a great business for other banks too. But rigorous management and its position among Hispanics give BofA an edge. Consider credit cards. Card companies are waging war for customers, extending credit to ever-riskier clients and vastly expanding promotion budgets. As a result, defaults are soaring while profits are dropping. Not at BofA. Since 2000, it has risen from around fifth place to first as the most profitable non-sub-prime player in cards. Last year, it earned 8.6 cents for every dollar in loans, versus an average of 6.8 cents (Citigroup made less than 4 cents), while posting the best default record in the industry.

Bank of America wins at cards by targeting a clientele that it knows well: its own customers. People with checking and savings accounts give the bank a special window into their finances. The company has found that customers who bank responsibly--for example, by not bouncing checks--are excellent credit risks who tend to pay their BofA bills first. By wooing its own customers, the company swelled its credit card portfolio 29% last year. Of course, other banks also mine their retail customers for credit card business. The difference is that BofA has so many more customers, and has been doing so longer.

The Hispanic factor is BofA's ace in the hole. More than three-quarters of America's Hispanics live in five states--California, Nevada, Arizona, New Mexico, and Texas. BofA is either first or second in all of them except Nevada, where it is third. In California, BofA has the largest market share of any retail bank--and of every four Hispanics with bank accounts, three are with BofA.

The population of the 21 states where BofA does business is growing twice as fast as in the rest of the country, in large part because of Hispanic influence. But that fast-growing market is underserved. Only 58% of Hispanics have checking accounts, versus 93% for non-Hispanic whites. About half as many Hispanics have credit cards as the average American. As Hispanic incomes rise, the demand for mortgages, home equity lines, and credit cards is going to explode. Says Eusebio Rivera, BofA's chief of Hispanic initiatives: "We find that when working class Hispanics' incomes rise by x, the dollars they spend on banking rise by five-x."

Until recently, though, paperwork--or more accurately, the lack of it--made capturing those x's difficult. Few of the five million undocumented Hispanic immigrants had bank accounts, because they lacked sufficient identification. "They stuffed money into their shoes and under their beds," says Linell Ruiz-Esparza, a branch manager in Los Angeles. In late 2001, that changed for Mexicans when banks began accepting an ID issued by Mexican consulates, the Matricula Consular. Almost two million Mexicans have already obtained the card, largely because it's a key into the banking system. "I'm getting one so that I can have a bank account," says Perfecto, a 24-year-old supermarket cashier who was waiting outside the New York consulate. "Without it, I can't cash checks, either." Thanks to the Matricula, cash flowed from under the mattresses and into bank accounts. "You can't believe how big the deposits are," says Ruiz-Esparza. "Some immigrants arrive with $20,000 in cash." BofA often sends staff out to ply those waiting for the Matricula Consular with brochures and coffee.

SafeSend is proving strong bait to reel in consumers. No fewer than 37% of the Hispanics who have signed up for SafeSend open other accounts. It helps that many Hispanics associate BofA's name with a rock-solid national bank; "Bank of America" sounds similar to the well-regarded Banco de Mexico, Mexico's federal reserve. (In fact, that is why after the merger of NationsBank and BankAmerica in 1998, management decided to christen the new entity the Bank of America.)

"Hispanics are incredibly loyal to brands and to people," says Rivera. "For them, loyalty is more important than the price." Coke's done just fine as the soft drink of the Americas. Bank of the Americas? That's a good gig too.