Bank of America will devote more capital to trading, says CEO Moynihan

BANK of America chief executive officer Brian Moynihan said the bank is continuing to invest in its markets division as it seeks to increase market share.

“We increased the size of the business three or four years ago, and that has borne fruit,” Moynihan said in a wide-ranging interview with Bloomberg’s David Westin on Tuesday (Dec 19), adding that the bank plans to allocate more capital to trading. “As long as they can keep deploying it, we’ll keep pushing capital.”

At an industry conference earlier in December, Moynihan said the Charlotte, North Carolina-based bank’s sales and trading unit is on track to be up in the low single digits in the final three months of the year. The team, led by James DeMare, is on track for “probably the best fourth quarter we’ve ever had,” he said at the time.

In Tuesday’s interview, held on Bank of America’s trading floor, Moynihan also said consumers are in good shape, with balances that are “multiples” of what they were before the pandemic. Moynihan said spending slowed as inflation rose, but overall consumers are still spending 4 per cent to 5 per cent more this year than they did last year. 

Moynihan spoke with Bloomberg near the end of 2023, a year marked by wild market swings, rising geopolitical tensions, and the Fed’s efforts to keep inflation in check by rising interest rates. Earlier this month, the CEO said there are signs of the US economy slowing, but his firm still expects a soft landing rather than a recession.

Moynihan said Tuesday that loan balance growth on the commercial side has been “sluggish,” with companies borrowing less because it’s more expensive, and they are worried about demand amid a potential economic slowdown. BLOOMBERG