At a time when the financial sector has been left behind by a strong stock market rally, BofA has stood above the crowd.
Bank of America CEO Brian Moynihan said Thursday that he expects „immediate impact“ if Congress passes tax reform.
His comments come the same day the House passed a budget that helps pave the way for a Republican-sponsored plan that would slash corporate and personal taxes and generally reform the nation’s tax code.
„I think there will be immediate impact and that people will have the optimism which is built around it fulfilled, which has been really a part of the problem for a lot of policy decisions,“ Moynihan told CNBC’s “ Fast Money Halftime Report .“ „That’s a good thing. Is there a danger of retrenchment if it doesn’t happen? Yes, absolutely. Do we need it as a country? Yes, we need to have a lower tax rate to be competitive.“
At a time when the financial sector has been left behind by a strong stock market rally, BofA has stood above the crowd even as it has had to withstand some of the same headwinds as other banks.
The second-largest U. S. bank by assets reported third-quarter earnings of 48 cents a share, ahead of Wall Street estimates. The bank did say it had seen a 22 percent slide in bond trading, mirroring a broader industry trend.
For the year, BofA shares are up more than 26 percent, easily outdistancing the S&P 500’s return of 14.5 percent and the SPDR Bank ETF, which has gained about 5.5 percent.
Moynihan also praised the pro-business environment created by Washington, which he said is helping his company succeed, in particular the lowering of regulatory barriers.
„Those are good ideas for business,“ he said. „You forget that the economy is growing at 2-plus percent and that compounds and compounds and that compounds into earnings.“
Despite his thoughts about regulation, Moynihan passed on the opportunity to state a preference for Fed chair. President Donald Trump is in the midst of deciding who will run the central bank after current Chair Janet Yellen’s term expires in February.
BofA has slashed staff since the financial crisis, lopping off 5 percent over the past year and 74,000 since Moynihan took over in 2010.
In the meantime, it has invested in multiple parts of its business, in particular mobile banking, which he said has seen „double-digit growth.“
Moynihan said guiding the bank has been a matter of finding ways to improve bottom line as the economy has plodded along. However, he dismissed the idea that the bank might want to split off the Merrill Lynch investment banking operation acquired during the crisis.
„We’ve been investing along the way. That’s what we talk about as part of our responsible growth thought process,“ he said. „We have to be able to invest in the future in a slow-growth environment.“
