BofA CEO Eyes Market-Share Gains While Europe Peers Sound Alarm

  • U.S. firms are capitalized, liquid, ‘dying for the business’
  • Across industry, second quarter was ‘kind of OK’ for earnings

U.S. banks contending with tough rules and markets are still stronger than many overseas rivals and will soak up business, Bank of America Corp. Chief Executive Officer Brian Moynihan said.

“We went through so much restructuring early” in the wake of the 2008 financial crisis, Moynihan told an audience late Monday at an event in Washington. Now, big U.S. banks are “well capitalized, very liquid, dying for the business,” he said. “And I think other parts of the world are shaking their banking system through the works right now. We are the beneficiary of that.”

The remarks by Moynihan, who has spent much of his six years atop the firm resolving legal claims and overhauling its controls and balance sheet, contrast with alarms being raised by peers in Europe. Societe Generale SA CEO Frederic Oudea said last year the region needs to preserve at least five or six global banks. In a speech last month, the head of London-based Barclays Plc, James “Jes” Staley, warned European firms are at risk of ceding control of local capital markets to American firms.

“To my mind, that’s a problem,” Staley said.

But for Moynihan, the competitive advantage was among a few bright spots he highlighted during a wide-ranging discussion at the event hosted by the Wall Street Journal. A moderator had asked the CEO whether he sees opportunities as European banks are forced to retrench. “We do,” he responded.

Barclays, Deutsche Bank AG and Credit Suisse Group AG are among those scaling back.

Model’s Advantage

Moynihan also credited the so-called universal bank model -- providing as many financial services as possible to clients -- as an advantage in the current environment, while eschewing the notion that banks like his should break into smaller parts.

“Even with the first quarter being down from the year before, the market shares moved to the universal bank model,” Moynihan told the crowd of chief financial officers at the Park Hyatt hotel. The integrated strategy works, he said.

Moynihan, 56, tempered his remarks on other subjects. Stiff capital rules are making it tough for banks like his to lend more, which could spur growth, he said. Concerns about the global economy have kept interest rates low and discouraged some capital markets business, he said.

Still, the second quarter hasn’t been as bad as the year’s initial months, when markets swung and investors pulled back.

"The reality is the trading volumes and stuff have actually been fine,” he said. “It’s going to be interesting to see how people report this quarter, but most of us were at an industry conference a little bit ago -- last week, the week before -- and most of us said, ‘you know, it’s kind of OK.’”

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