Bank of America (NYSE:BAC) Chairman and CEO Brian Moynihan said the U.S. economy remains resilient, supported by consumer spending, solid credit quality and increased borrowing activity among small and midsized businesses.
Speaking at Barclays’ Global Financial Services Conference, Moynihan said the bank’s customer data showed consumer spending rose 4% in August from a year earlier. Spending increased across categories including cruises, restaurants, out-of-home entertainment and movies, while customer paycheck data showed wage growth in the range of 3% to 4%.
Moynihan said Bank of America continues to monitor unemployment claims, delinquency trends and signs of stress in consumer payment behavior. Higher gasoline prices have affected affordability perceptions, he said, noting that September spending on gasoline was up 15% to 20% on the bank’s credit and debit cards. Still, he said the increase represented only a limited portion of total payments activity.
Commercial Lending, Deposits and Capital Markets
Commercial lending has been a major source of growth, according to Moynihan. He said lending growth has broadened beyond capital-markets-related businesses and into middle-market, large-corporate and small-business customers. The bank expects high-single-digit commercial loan growth in the current quarter, following similar performance in the prior period.
Consumer loan growth has been more mixed. Moynihan said credit card balances increased 4% in the previous quarter, while mortgage activity remained quiet and auto lending was steady rather than rapidly expanding.
On deposits, Moynihan said the bank has seen stabilization in noninterest-bearing deposits and continued growth in consumer checking accounts. Bank of America has added roughly 160,000 to 170,000 net new checking accounts per quarter and about 5 million over the past five years, he said.
The company is not pursuing high-cost certificates of deposit simply to add funding, Moynihan said, citing the bank’s approximately $2 trillion deposit base and $1.2 trillion in loans. “We do not do things to lose money,” he said.
For the third quarter, Moynihan projected investment banking fees of approximately $1.6 billion to $1.8 billion. He said the broader investment banking fee pool was down about 10% year over year, while Bank of America could decline somewhat more because of its positioning in businesses with greater activity. Sales and trading revenue is expected to be roughly flat from a strong year-earlier quarter, which would still make it one of the bank’s better third quarters, he said.
Wealth and investment management assets-under-management fees are expected to increase 10% to 15%, according to Moynihan.
Net Interest Income and Returns
Moynihan said net interest income, or NII, was performing in line with the outlook Bank of America provided at its investor day. He said the company expects upper-single-digit NII growth, in the range of 7% to 8%, along with further improvement in net interest yield as loans and deposits reprice.
Higher interest rates would support that repricing dynamic, although Moynihan said loan demand remains an important consideration. He said the bank’s deposit funding advantage and commercial loan growth were helping drive the NII outlook.
The company continues to target 200 to 300 basis points of positive operating leverage, though Moynihan said the current quarter could be more difficult because of a rapid change in capital-markets fee growth. He said Bank of America should return to that range in the fourth quarter if capital-markets conditions improve.
Moynihan said Bank of America had reached its 16% return on tangible common equity, or ROTCE, target in the prior quarter. He said continued net interest income growth, balance-sheet efficiency and disciplined expense management should support progress toward the company’s longer-term return objectives.
AI Investment and Risk Controls
Bank of America is using artificial intelligence across its operations while maintaining human oversight, Moynihan said. He said the bank has implemented roughly 130 to 150 AI use cases and expects about 50 more to come online. The company has estimated about $400 million of costs associated with the effort and approximately $800 million of expected benefits, he said.
The bank has given its more than 200,000 employees access to AI tools, including approximately 18,000 coders who Moynihan said have achieved productivity gains of 10% to 15%. Rather than broadly cutting jobs, the company is managing headcount through hiring and attrition, he said.
Moynihan emphasized that Bank of America does not allow AI systems to operate without human accountability, particularly in customer-facing and credit-related applications. The bank’s Erica virtual assistant handles about 700 defined customer requests, he said, because responses must be accurate.
“We own the answer,” Moynihan said, referring to the company’s approach to AI-generated work and customer interactions.
Stablecoins, Infrastructure and International Expansion
Moynihan also addressed stablecoins, saying their expansion into payments and interest-bearing alternatives could reduce noninterest-bearing deposits and shrink bank lending capacity. He said Bank of America has developed stablecoin capabilities and would offer them if customers demand them, while the industry is also exploring tokenized deposits and cross-border payment applications.
The company plans to deploy $250 billion between the start of the year and July 4, 2027 to support infrastructure-related activity, including power generation and transmission, AI and data centers, transportation and other projects. Moynihan said much of that activity would be facilitated through capital markets rather than held on Bank of America’s balance sheet.
Separately, he described the bank’s investment in an online consumer lender in India as a partnership with Jio and Reliance-related businesses. Bank of America will contribute commercial banking and small- and medium-sized lending expertise, while its partner provides local reach and knowledge, he said. Moynihan said the arrangement was not a move to establish a traditional retail bank in India.
About Bank of America (NYSE:BAC)
Bank of America Corporation (NYSE:BAC) is a diversified financial services company serving individual consumers, businesses, institutional investors and governments. Its operations include consumer banking, credit and debit cards, mortgages, small-business banking, commercial banking, investment banking, securities trading and investment management.
The company provides consumer and wealth-management services through Bank of America and Merrill, including deposit accounts, lending, brokerage, retirement planning, financial advice and private banking.
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