Bank of America Results: The New Life of Brian

Published in Les Echos
(France) on 14 October 2021
by Les Echos (link to originallink to original)
Translated from by Hal Swindall. Edited by Elizabeth Cosgriff.
Bank of America shines amidst the reopening of the U.S. economy. Although not America's most profitable bank, it draws its dynamism from its clients and not just from mergers and acquisitions.

"We fought the competition and we won,"* Bank of America Corp. boss Brian Moynihan triumphantly declared on the announcement of its impressive quarterly earnings. With shares up 3.2%, its better-than-predicted results cannot be explained merely by the lifting of the pandemic lockdown.

The strength of Bank of America's interest income, meaning interest paid to it minus interest paid to clients, has reached 8% compared to 5% at best for JP Morgan Chase & Co.’s and Wells Fargo & Company’s figures online, with Citigroup Inc.’s a little below them.

Bank of America has succeeded in raising its revenues in tandem with the reopening of the U.S. economy while taking its slice of the pie from mergers and acquisitions.

This economic upswing is not only an encouraging signal for Wall Street, but also favors Bank of America's strategy as the best one for Uncle Sam's four largest banking networks since the end of 2019.

A Way To Go

The CEO of Charlotte’s bank has spent the past few years stitching up the tears from the last great financial crisis, complicated by the resale of Merrill Lynch.

Yet Bank of America has a way to go in matching the profitability of the leading firm, JP Morgan Chase, which provided Moynihan's counterpart there, Jamie Dimon, a much better romance with the stock market, with shares earning 1.9 times their value versus 1.5 times for Bank of America’s.

*Editor’s note: This quotation, accurately translated, could not be verified.


Bank of America brille avec la réouverture de l'économie. Sans être la banque américaine la plus rentable, elle a tiré parti du dynamisme de ses clientèles, pas seulement dans les fusions-acquisitions.

« Nous nous battons avec la concurrence, et nous gagnons ». Le patron de Bank of America, Brian Moynihan, peut avoir le triomphe bien peu modeste à l'occasion de la salve des publications trimestrielles. Ses résultats meilleurs que prévus (+3,2 % pour l'action) ne s'expliquent pas seulement par les reprises de provisions pandémiques.

La vigueur de ses revenus nets d'intérêts (intérêts perçus moins intérêts versés) brille face aux rivaux, une croissance (+8 %) bien supérieure aux attentes (5 % de mieux), là où JP Morgan et Wells Fargo sont en ligne, et Citigroup un peu au-dessus.

La « banque de l'Amérique » a réussi à faire croître ses crédits à la faveur de la réouverture de l'économie, tout en prenant toute sa part du gâteau des commissions de fusions et acquisitions.

Ce dynamisme commercial constitue en soi un bon signal général pour Wall Street, mais aussi une raison particulière de gratifier son cours de la meilleure performance des quatre grands réseaux bancaires de l'Oncle Sam depuis la fin de 2019.

Chemin à parcourir

Le PDG de la banque de Charlotte a mis des années à cicatriser les plaies de la grande crise financière, compliquée par le rachat de Merrrill Lynch.

Mais il a encore du chemin à parcourir pour rivaliser avec la rentabilité des fonds propres du leader JP Morgan, qui vaut à son homologue Jamie Dimon une cote d'amour boursière bien supérieure (1,9 fois l'actif net contre 1,5 fois).
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