1 00:00:00,080 --> 00:00:03,240 Speaker 1: Bank of America Traders posted a record second quarter as 2 00:00:03,240 --> 00:00:05,960 Speaker 1: the company reaped the benefits of volatile markets and net 3 00:00:06,000 --> 00:00:09,360 Speaker 1: interest income top analyst estimates. For more, we sent things 4 00:00:09,360 --> 00:00:11,639 Speaker 1: on over to David Weston. He's standing by with Bank 5 00:00:11,680 --> 00:00:13,920 Speaker 1: of America Chair and CEO Brian moynahan. 6 00:00:14,000 --> 00:00:17,000 Speaker 2: Hey, David, thanks so much Tim for our Bloomberg is worldwide. 7 00:00:17,040 --> 00:00:19,760 Speaker 2: This is Bloomberg. I'm David Weston, and this is Brian 8 00:00:19,800 --> 00:00:22,840 Speaker 2: moyhan who's the chair CEO of Bank of America. Brian, 9 00:00:22,920 --> 00:00:24,520 Speaker 2: thank you so much for being back with this, really 10 00:00:24,520 --> 00:00:25,800 Speaker 2: appreciating this busy day for you. 11 00:00:27,840 --> 00:00:29,639 Speaker 3: That's great to be here. David, good to see you again. 12 00:00:30,480 --> 00:00:32,600 Speaker 2: So let me start with one of the favorite questions 13 00:00:32,640 --> 00:00:34,400 Speaker 2: I have for you. Because you, at Bank of America 14 00:00:34,479 --> 00:00:37,800 Speaker 2: have a window into so much of America, consumers and 15 00:00:37,920 --> 00:00:40,280 Speaker 2: businesses of all sizes, you sort of have a sense 16 00:00:40,360 --> 00:00:42,960 Speaker 2: of where the pulse of America is. There's been a 17 00:00:43,000 --> 00:00:45,960 Speaker 2: lot of changes announced and talked about in Washington. Do 18 00:00:46,000 --> 00:00:48,800 Speaker 2: you see from your customers much reaction to that, either 19 00:00:48,840 --> 00:00:50,919 Speaker 2: to the tak of tariffs, to the one big beautiful 20 00:00:50,920 --> 00:00:53,960 Speaker 2: bill to consumers or business Are they changing their plans 21 00:00:54,000 --> 00:00:54,440 Speaker 2: because of that? 22 00:00:56,520 --> 00:00:59,000 Speaker 4: So if you look on the consumer side, in our 23 00:01:00,200 --> 00:01:03,600 Speaker 4: seventy million consumers who engage with the economy every day 24 00:01:03,880 --> 00:01:07,199 Speaker 4: and they send through their accounts and their and spend 25 00:01:07,200 --> 00:01:10,440 Speaker 4: the cash and everything about four trillion, five trillion dollars 26 00:01:10,480 --> 00:01:14,040 Speaker 4: a year. That grew up four percent plus the second 27 00:01:14,120 --> 00:01:16,520 Speaker 4: quarter twenty five or the second course of twenty four. 28 00:01:16,880 --> 00:01:19,399 Speaker 4: So they because they're employed and because wage growth, and 29 00:01:19,440 --> 00:01:22,240 Speaker 4: that's not every single consumer, it's but in the in 30 00:01:22,319 --> 00:01:24,960 Speaker 4: the large, in the main, they are continuing to grow 31 00:01:25,160 --> 00:01:27,960 Speaker 4: and spend more and that helps the economy. 32 00:01:28,080 --> 00:01:29,839 Speaker 3: And so you're seeing in some. 33 00:01:29,800 --> 00:01:33,320 Speaker 4: Of the modern income households there's a little bit of 34 00:01:33,400 --> 00:01:35,959 Speaker 4: chef moving around to different things. You're seeing people trade 35 00:01:36,000 --> 00:01:38,960 Speaker 4: for one thing another, less planes, more cruises earlier, that's 36 00:01:39,000 --> 00:01:41,199 Speaker 4: leveling out now, a lot more going to movies because 37 00:01:41,200 --> 00:01:42,000 Speaker 4: the movies are good. 38 00:01:42,200 --> 00:01:44,200 Speaker 3: But the end of the day, they're spending. 39 00:01:43,880 --> 00:01:47,760 Speaker 4: Discretion necessary about the same percentage they traditionally spent. They've 40 00:01:47,800 --> 00:01:50,680 Speaker 4: got money in their accounts, they're employed, and the wage 41 00:01:50,680 --> 00:01:53,760 Speaker 4: growth has been relatively strong, and you know, so they're 42 00:01:53,800 --> 00:01:56,040 Speaker 4: pretty good shape. The credit quality is good, they have 43 00:01:56,080 --> 00:01:59,440 Speaker 4: equity in their homes. They're rate financing, and the mortgage 44 00:01:59,480 --> 00:02:01,720 Speaker 4: so it was pretty good. When you go to small businesses, 45 00:02:01,720 --> 00:02:04,520 Speaker 4: that's more of the question small medium sized businesses because 46 00:02:04,800 --> 00:02:08,440 Speaker 4: the interest rate environment hits them harder because they borrow 47 00:02:08,440 --> 00:02:10,360 Speaker 4: on lines of credit short term for a lot of 48 00:02:10,400 --> 00:02:13,840 Speaker 4: their activities, and that rate went up substantially. And anythink 49 00:02:13,880 --> 00:02:16,160 Speaker 4: about the if I'm a one hundred million dollar company, 50 00:02:16,160 --> 00:02:18,360 Speaker 4: a fifty million dollar company here in North Carolina, and 51 00:02:18,400 --> 00:02:21,239 Speaker 4: I'm engaging in the world finance, I'm importing goods and 52 00:02:21,320 --> 00:02:25,880 Speaker 4: manufacturing them, further manufacturer, I'm selling them. You know, it 53 00:02:26,000 --> 00:02:27,800 Speaker 4: got pretty interesting here trying to figure out all the 54 00:02:28,040 --> 00:02:30,399 Speaker 4: trade and tariffs. So I think certainly on the tax 55 00:02:30,480 --> 00:02:33,600 Speaker 4: rate helps them, meaning the big beautiful bill passing and 56 00:02:33,639 --> 00:02:35,679 Speaker 4: the tax rate that's a very good thing. The alternative 57 00:02:35,639 --> 00:02:38,160 Speaker 4: would have not been good if their tax rates would change. 58 00:02:38,720 --> 00:02:42,560 Speaker 4: A satisfactory resolution to the trade so that they could 59 00:02:42,680 --> 00:02:44,160 Speaker 4: learn the rules of the road over the next thirty 60 00:02:44,200 --> 00:02:46,639 Speaker 4: sixty ninety days and get their plans for next year 61 00:02:46,680 --> 00:02:49,600 Speaker 4: put together. And I think ultimately they're gonna we've got 62 00:02:49,600 --> 00:02:52,880 Speaker 4: the satisfactory resolution on immigration and population growth because the 63 00:02:52,960 --> 00:02:54,680 Speaker 4: end of the day, when I'm hearing more from the 64 00:02:54,720 --> 00:02:59,680 Speaker 4: construction companies, farming companies and travel entertainment type companies. Is 65 00:02:59,840 --> 00:03:02,480 Speaker 4: I'm starting to worry about I'm starting to struggle with 66 00:03:02,520 --> 00:03:07,160 Speaker 4: labor availability at any price, and that's that we got 67 00:03:07,200 --> 00:03:09,440 Speaker 4: to make sure they have the workers because they will 68 00:03:09,440 --> 00:03:10,320 Speaker 4: supply great service. 69 00:03:10,360 --> 00:03:11,480 Speaker 3: Economy continue to grow. 70 00:03:12,040 --> 00:03:14,400 Speaker 2: One of the things you reported today was net interest income, 71 00:03:14,440 --> 00:03:17,200 Speaker 2: which is really important to all banks, but particularly Bank 72 00:03:17,240 --> 00:03:20,120 Speaker 2: of America and just steady growth that you're showing in 73 00:03:20,160 --> 00:03:22,880 Speaker 2: that how sensitive are you to the rates set by 74 00:03:22,919 --> 00:03:27,239 Speaker 2: the Fed? If that comes down substantially, does that affect 75 00:03:27,280 --> 00:03:28,280 Speaker 2: Bank of America. 76 00:03:28,000 --> 00:03:33,720 Speaker 4: Much so embedded in our estimates. So we've told the 77 00:03:33,760 --> 00:03:36,840 Speaker 4: world that this quarter we had fourteen point eight billion 78 00:03:36,880 --> 00:03:40,360 Speaker 4: dollars in net interest income, and that is the fourth 79 00:03:40,360 --> 00:03:42,960 Speaker 4: straight quarter of growth and came off the floor last year. 80 00:03:43,040 --> 00:03:45,280 Speaker 4: This quarter, when I was talking to was the lowest 81 00:03:45,280 --> 00:03:47,920 Speaker 4: it's been. This quarter was a record in the company's history, 82 00:03:48,160 --> 00:03:50,080 Speaker 4: and we're saying we're going to grow from that record 83 00:03:50,360 --> 00:03:53,160 Speaker 4: to fifteen five to fifteen seven and two more quarters 84 00:03:53,160 --> 00:03:55,760 Speaker 4: the third quarter and the fourth quarter. That embeds in 85 00:03:55,800 --> 00:03:57,840 Speaker 4: it the rate cuts in the market that are expected 86 00:03:57,880 --> 00:03:59,960 Speaker 4: by market. We don't we only show it that one 87 00:04:00,200 --> 00:04:03,000 Speaker 4: if you have rate cuts over above that that would 88 00:04:03,040 --> 00:04:06,480 Speaker 4: hurt that number, but it would still grow frankly and 89 00:04:06,520 --> 00:04:09,160 Speaker 4: so and that the good thing about that is because 90 00:04:09,160 --> 00:04:11,320 Speaker 4: a great loan of Positi growth seven percent loan growth 91 00:04:11,360 --> 00:04:14,120 Speaker 4: four percent to Posit growth over the last year. That's 92 00:04:14,120 --> 00:04:15,600 Speaker 4: in the system that's capitalized it. 93 00:04:15,640 --> 00:04:17,200 Speaker 3: I mean, that's here. It doesn't go away. 94 00:04:17,440 --> 00:04:19,920 Speaker 4: And as that continues to stay and we add to it, 95 00:04:20,160 --> 00:04:21,880 Speaker 4: what you're starting to see is that sets us up 96 00:04:21,920 --> 00:04:24,120 Speaker 4: great for next year for further ANII growth and further 97 00:04:24,200 --> 00:04:27,440 Speaker 4: EPs growth. So this quarter was the trickiest quarter to 98 00:04:27,440 --> 00:04:29,680 Speaker 4: get through because you every year we finally got some 99 00:04:29,760 --> 00:04:32,200 Speaker 4: MENI growth, but you every year the market's business doing 100 00:04:32,200 --> 00:04:34,960 Speaker 4: strong expense growth is a little more robust. That'll get 101 00:04:35,080 --> 00:04:37,120 Speaker 4: lined and then you'll see NI dropped the bottom line 102 00:04:37,160 --> 00:04:39,159 Speaker 4: and it will set up for twenty twenty six we 103 00:04:39,200 --> 00:04:39,960 Speaker 4: do the more growth. 104 00:04:40,120 --> 00:04:41,760 Speaker 2: When you talk about twenty twenty six, one of the 105 00:04:41,760 --> 00:04:43,920 Speaker 2: things we're going to have is at all likely a 106 00:04:43,960 --> 00:04:46,719 Speaker 2: new FED chair. There's been a lot of talk even 107 00:04:46,760 --> 00:04:49,280 Speaker 2: today in Washington by the FED chair, and you said 108 00:04:49,400 --> 00:04:52,200 Speaker 2: you believe in an independent FED. But if in fact 109 00:04:52,279 --> 00:04:56,080 Speaker 2: President Trump gets his wish, as is his right under law, 110 00:04:56,160 --> 00:04:58,920 Speaker 2: to appoint a new chair who will be more in line. 111 00:04:58,720 --> 00:04:59,480 Speaker 3: With his views. 112 00:04:59,520 --> 00:05:01,680 Speaker 2: He said he thinks the interest rate really at one 113 00:05:01,720 --> 00:05:04,560 Speaker 2: percent or even below that, is that good for Bank 114 00:05:04,560 --> 00:05:06,120 Speaker 2: of America? Is that good for the economy. 115 00:05:07,960 --> 00:05:10,719 Speaker 4: Well, let me make two things. One is you're absolutely 116 00:05:10,800 --> 00:05:13,160 Speaker 4: right and may have next year. The term the curve 117 00:05:13,160 --> 00:05:17,120 Speaker 4: FED chair ends after being reappointed, and it's the right 118 00:05:17,160 --> 00:05:20,320 Speaker 4: of the elected president to appoint the next successor and 119 00:05:20,360 --> 00:05:23,400 Speaker 4: go through Congress. And I think in that dialogue around 120 00:05:23,440 --> 00:05:25,240 Speaker 4: that there will be a lot of dialogue about, Okay, 121 00:05:25,279 --> 00:05:26,960 Speaker 4: how do you set interestrates? What do you think about 122 00:05:27,000 --> 00:05:29,919 Speaker 4: interest rates? Because the FED is an independent agency and 123 00:05:29,920 --> 00:05:32,080 Speaker 4: they're they're meant to be outside the purview of the 124 00:05:32,120 --> 00:05:35,480 Speaker 4: executive and Congress. They are called a task and are 125 00:05:35,480 --> 00:05:37,520 Speaker 4: monitored and they're reviewed and. 126 00:05:37,560 --> 00:05:38,200 Speaker 3: All the things. 127 00:05:38,520 --> 00:05:40,920 Speaker 4: But the really reality was set up to be independent 128 00:05:41,000 --> 00:05:42,080 Speaker 4: so that our Central Bank. 129 00:05:41,880 --> 00:05:42,960 Speaker 3: Of America was independent. 130 00:05:43,080 --> 00:05:45,440 Speaker 4: So I think no matter who gets in, they're going 131 00:05:45,520 --> 00:05:46,960 Speaker 4: to look at it and have to look at the 132 00:05:47,000 --> 00:05:48,920 Speaker 4: facts and make a decision because if you drop rates 133 00:05:48,960 --> 00:05:51,120 Speaker 4: too far, inflation you may kickup and then you're gonna 134 00:05:51,120 --> 00:05:53,239 Speaker 4: have to raise them back quickly. On the other hand, 135 00:05:53,360 --> 00:05:55,480 Speaker 4: if you think the prior FED has been slow to 136 00:05:55,520 --> 00:05:57,400 Speaker 4: the lower rates you might lower and faster. Our team 137 00:05:57,760 --> 00:05:59,680 Speaker 4: believes that the Fed will lower rates in a second 138 00:05:59,680 --> 00:06:01,960 Speaker 4: half of next year by one hundred basis points. No 139 00:06:02,120 --> 00:06:04,560 Speaker 4: change until then because inflation is still going through the system. 140 00:06:05,000 --> 00:06:07,240 Speaker 4: That brings the FED funds rate down closer to three, 141 00:06:07,600 --> 00:06:10,640 Speaker 4: which they think is probably more of a long term 142 00:06:10,720 --> 00:06:13,240 Speaker 4: rate and frankly, is more similar to what we had 143 00:06:13,240 --> 00:06:16,240 Speaker 4: for most of American history. What's been unusual is the 144 00:06:16,320 --> 00:06:19,840 Speaker 4: period after global financial crisis, a very low interest rate structure. 145 00:06:20,080 --> 00:06:22,120 Speaker 4: That is really not a good place to be. Honestly, 146 00:06:22,160 --> 00:06:24,240 Speaker 4: we'd rather have a higher interest rate structure, a little 147 00:06:24,240 --> 00:06:26,960 Speaker 4: more inflation, a little more robust economic growth. So I 148 00:06:27,000 --> 00:06:29,400 Speaker 4: think everybody asks me a little careful about keeping that 149 00:06:29,440 --> 00:06:32,280 Speaker 4: engine going, because if this engine fails, a whole world fails. 150 00:06:33,080 --> 00:06:36,800 Speaker 2: You also reported increased loans from Bank of America, which 151 00:06:36,800 --> 00:06:39,480 Speaker 2: is good news for you, and tell us about your 152 00:06:39,520 --> 00:06:42,960 Speaker 2: competition for that. We now have private credit really coming 153 00:06:42,960 --> 00:06:45,839 Speaker 2: into that area substantially. There's talk that maybe that would 154 00:06:45,839 --> 00:06:47,600 Speaker 2: be peaking. Is that the way you see it? 155 00:06:49,560 --> 00:06:52,600 Speaker 4: Well, I think that. So if you think about all 156 00:06:52,600 --> 00:06:55,080 Speaker 4: our loans, a trillion and one of loans, say half 157 00:06:55,080 --> 00:06:58,320 Speaker 4: from the consumer and so there's that competition's always been there. 158 00:06:58,320 --> 00:07:00,599 Speaker 4: Half of what goes on for consumer lending goes on 159 00:07:00,680 --> 00:07:03,400 Speaker 4: outside the regulated bank industry. That's been true for a 160 00:07:03,400 --> 00:07:06,120 Speaker 4: long period of time. We saw growth across all the segments. 161 00:07:06,200 --> 00:07:08,680 Speaker 4: We feel very good about that. We go to commercial, 162 00:07:08,760 --> 00:07:11,840 Speaker 4: the private credit effects sort of the leverage finance and 163 00:07:12,480 --> 00:07:15,040 Speaker 4: some of the areas, and it's been an effective competitor. 164 00:07:15,080 --> 00:07:15,559 Speaker 3: It's grown. 165 00:07:15,840 --> 00:07:18,000 Speaker 4: I think we in the industry and we in the 166 00:07:18,040 --> 00:07:20,720 Speaker 4: company back of America have come back with a way 167 00:07:20,760 --> 00:07:23,160 Speaker 4: of operating we think is consistent with our credit quality, 168 00:07:23,520 --> 00:07:26,440 Speaker 4: consistent with who are customers, and will also deliver a 169 00:07:26,480 --> 00:07:29,640 Speaker 4: competitive product. Then we grew commercial loans leave us side 170 00:07:29,680 --> 00:07:30,559 Speaker 4: the market based business. 171 00:07:30,600 --> 00:07:31,960 Speaker 3: We grew commercial loans. 172 00:07:31,640 --> 00:07:34,520 Speaker 4: I think seventy eight percent excluding the Cree office that 173 00:07:34,560 --> 00:07:37,080 Speaker 4: we are running down still in the middle market, which 174 00:07:37,120 --> 00:07:38,280 Speaker 4: is as strong as anybody. 175 00:07:38,320 --> 00:07:39,480 Speaker 3: And we feel very good about the. 176 00:07:39,440 --> 00:07:42,240 Speaker 4: Credit quality of those loans, but more importantly feel good 177 00:07:42,240 --> 00:07:45,160 Speaker 4: about the thirty fifty seventy year corporate relationships we have 178 00:07:45,320 --> 00:07:47,400 Speaker 4: and if they want a different kind of financing, we'll 179 00:07:47,400 --> 00:07:49,280 Speaker 4: bring it and take it to the market form like 180 00:07:49,320 --> 00:07:50,400 Speaker 4: we've always done. 181 00:07:50,680 --> 00:07:53,000 Speaker 2: You also had a great quarter in terms of trading, 182 00:07:54,240 --> 00:07:57,160 Speaker 2: give us a sense about where you're going with your 183 00:07:57,480 --> 00:08:00,640 Speaker 2: trading activities and your investment bank. In the past, you've 184 00:08:00,680 --> 00:08:03,960 Speaker 2: added more balance sheet strength to that. You've come up 185 00:08:03,960 --> 00:08:06,200 Speaker 2: in that. Do you plan to keep doing more of that? 186 00:08:08,160 --> 00:08:08,360 Speaker 3: Yeah? 187 00:08:08,440 --> 00:08:10,840 Speaker 4: And so Jim Damar and the global markets business, which 188 00:08:10,880 --> 00:08:12,760 Speaker 4: is a trading business as you call it, they are 189 00:08:12,800 --> 00:08:15,440 Speaker 4: up fifteen percent year every year. Both fixed income and 190 00:08:15,520 --> 00:08:19,440 Speaker 4: equities were up, and he has had thirteenth straight quarters 191 00:08:19,480 --> 00:08:21,840 Speaker 4: like it is of year over year quarter of comparison growth. 192 00:08:21,960 --> 00:08:24,120 Speaker 4: And so there's some d and flows in that business. 193 00:08:24,680 --> 00:08:27,520 Speaker 4: But this quarter started off a little interesting with Liberation 194 00:08:27,640 --> 00:08:30,280 Speaker 4: Day and I think the first four of the biggest 195 00:08:30,360 --> 00:08:33,200 Speaker 4: days ever and equity stock trading occurred in the first 196 00:08:33,360 --> 00:08:35,240 Speaker 4: week of April or something like that. 197 00:08:35,280 --> 00:08:36,559 Speaker 3: So it was a pretty wild time. 198 00:08:36,880 --> 00:08:38,880 Speaker 4: But over the course of the quarter it got more 199 00:08:38,880 --> 00:08:42,040 Speaker 4: stable and they made it. We have given him more 200 00:08:42,080 --> 00:08:44,840 Speaker 4: capital and more balancing, hit him in the team more importantly, 201 00:08:45,040 --> 00:08:47,640 Speaker 4: and that team, under his guidance, has has delivered on 202 00:08:47,720 --> 00:08:50,200 Speaker 4: it is getting a good return on it, and we 203 00:08:50,240 --> 00:08:52,000 Speaker 4: have lots of capital. If he can put it to work, 204 00:08:52,120 --> 00:08:54,480 Speaker 4: there'll be more of it. The trick is he's also 205 00:08:54,520 --> 00:08:56,440 Speaker 4: got to use it efficiently and get that return on 206 00:08:56,920 --> 00:09:00,360 Speaker 4: table common equity, return to allocated capital straight when you 207 00:09:00,360 --> 00:09:03,360 Speaker 4: go to investment banking. Look, April was kind of quiet, 208 00:09:03,600 --> 00:09:05,280 Speaker 4: especially on the M and A side. For us, it 209 00:09:05,320 --> 00:09:07,160 Speaker 4: came back and you saw us. You know, it was 210 00:09:07,200 --> 00:09:08,679 Speaker 4: recently a three or four weeks ago we thought we 211 00:09:08,760 --> 00:09:11,120 Speaker 4: do one point two billion. We did one point four billion, 212 00:09:11,480 --> 00:09:13,760 Speaker 4: and with pipelines full, Matthew Coder and team are out 213 00:09:13,800 --> 00:09:14,640 Speaker 4: there driving at it. 214 00:09:14,800 --> 00:09:16,760 Speaker 3: We did. We lost some deals to other people in 215 00:09:16,800 --> 00:09:18,120 Speaker 3: the M and A. We were on the wrong side of 216 00:09:18,120 --> 00:09:19,040 Speaker 3: the trade. That happens. 217 00:09:19,240 --> 00:09:21,360 Speaker 4: But the reality is what really changed over the course 218 00:09:21,360 --> 00:09:23,679 Speaker 4: of the months was a financing side kicked in and 219 00:09:23,679 --> 00:09:26,480 Speaker 4: that you know, that's three quarters of our revenue, and 220 00:09:26,520 --> 00:09:28,640 Speaker 4: that that was good and that's why the revenue came up, 221 00:09:28,840 --> 00:09:30,560 Speaker 4: and that team does a good job and there's lots 222 00:09:30,559 --> 00:09:32,520 Speaker 4: of places to grow. That is going to be much 223 00:09:32,559 --> 00:09:35,559 Speaker 4: more dependent upon the IPO markets being open, the M 224 00:09:35,600 --> 00:09:38,200 Speaker 4: and A markets, the M and A taking place, and 225 00:09:38,520 --> 00:09:40,960 Speaker 4: I think was stability again back to the tax bill, 226 00:09:41,320 --> 00:09:44,480 Speaker 4: some trade stability, and then frankly deregulation. 227 00:09:44,920 --> 00:09:45,680 Speaker 3: You're going to see. 228 00:09:45,720 --> 00:09:48,920 Speaker 4: I think that activity keep kicking in as we moved 229 00:09:48,920 --> 00:09:51,880 Speaker 4: through twenty twenty five into twenty six, which will be 230 00:09:51,880 --> 00:09:53,840 Speaker 4: good for the economy because it creates a lot of activity, 231 00:09:53,880 --> 00:09:58,040 Speaker 4: investment changes in businesses, and all those things that we 232 00:09:58,120 --> 00:09:58,600 Speaker 4: expect to. 233 00:09:58,520 --> 00:10:02,280 Speaker 2: See you It took time out from your earnings announcement 234 00:10:02,320 --> 00:10:05,120 Speaker 2: to really focus on artificial intelligence, something you have been 235 00:10:05,120 --> 00:10:07,840 Speaker 2: talking about for quite some time and adopting, for example 236 00:10:07,840 --> 00:10:10,240 Speaker 2: with Erica that you have. Give us a sense of 237 00:10:10,240 --> 00:10:13,160 Speaker 2: how that's changing the business at Bank of America, for example, 238 00:10:13,240 --> 00:10:17,120 Speaker 2: on the expense side, does it really lead to saving 239 00:10:17,200 --> 00:10:17,800 Speaker 2: some costs? 240 00:10:19,760 --> 00:10:23,920 Speaker 4: So at the end of the day, the artificial intelligence, 241 00:10:23,920 --> 00:10:26,080 Speaker 4: as we know is an extension of a series of 242 00:10:26,880 --> 00:10:31,079 Speaker 4: technology capabilities that allow us to take work and have 243 00:10:31,160 --> 00:10:34,280 Speaker 4: machines do the work and people and enhance the people's 244 00:10:34,280 --> 00:10:36,200 Speaker 4: ability to do more work and do more things and 245 00:10:36,200 --> 00:10:38,320 Speaker 4: spend more time on things that aren't capable of going 246 00:10:38,360 --> 00:10:41,400 Speaker 4: through that. It just gives you a different sort of 247 00:10:41,600 --> 00:10:44,000 Speaker 4: a different attack surface for lack of better term. In 248 00:10:44,040 --> 00:10:46,600 Speaker 4: the past, we had three hundred thousand people fifteen years 249 00:10:46,640 --> 00:10:48,240 Speaker 4: ago in our company. Today we have two hundred twelve 250 00:10:48,240 --> 00:10:52,080 Speaker 4: thousand people. The companies bigger, complex, more transactions from that time, 251 00:10:52,360 --> 00:10:55,040 Speaker 4: our digital logins were probably I don't know, ten twenty 252 00:10:55,080 --> 00:10:56,679 Speaker 4: million a quarter and we felt good about it. They 253 00:10:56,679 --> 00:10:59,200 Speaker 4: were several billion or billion a month. Just to get 254 00:10:59,280 --> 00:11:01,680 Speaker 4: your sense, think of all the investment to do that. 255 00:11:01,920 --> 00:11:04,960 Speaker 4: But that digitization was customers doing things on their own 256 00:11:05,000 --> 00:11:07,000 Speaker 4: at ten o'clock at night and seven o'clock in the morning, 257 00:11:07,240 --> 00:11:09,960 Speaker 4: and that allowed us to save our time for our 258 00:11:09,960 --> 00:11:12,480 Speaker 4: people to go out and help customers solve difficult problems. 259 00:11:12,880 --> 00:11:13,320 Speaker 3: What AI. 260 00:11:13,720 --> 00:11:15,560 Speaker 4: The place that we think AI has real help is 261 00:11:15,559 --> 00:11:17,959 Speaker 4: in the preparation of our relationship management force and our 262 00:11:18,320 --> 00:11:21,360 Speaker 4: small business bankers, our business bankers, our commercial bankers, our 263 00:11:21,400 --> 00:11:24,720 Speaker 4: wealth management, our investment bankers. Allows them to be much 264 00:11:24,760 --> 00:11:28,400 Speaker 4: more prepared. So we're using those tools to prepare the information, 265 00:11:28,559 --> 00:11:31,520 Speaker 4: pull it together because it could take text and manipulate 266 00:11:31,559 --> 00:11:33,960 Speaker 4: it and put it into the forums and the capabilities. 267 00:11:34,120 --> 00:11:36,360 Speaker 4: So that's a big thing in front of us. We've 268 00:11:36,360 --> 00:11:38,079 Speaker 4: done five or seven hundred pitches so far, and that 269 00:11:38,440 --> 00:11:41,040 Speaker 4: cranking up. We see it in employee self help. If 270 00:11:41,120 --> 00:11:43,720 Speaker 4: you had a computer that went down at Bank of America, 271 00:11:43,720 --> 00:11:47,160 Speaker 4: you can click on Erica from employees and a chatbot 272 00:11:47,160 --> 00:11:48,800 Speaker 4: will take you all the way through the replacement of 273 00:11:48,800 --> 00:11:52,040 Speaker 4: your computer process and evolve no people and you'll get 274 00:11:52,040 --> 00:11:54,520 Speaker 4: the computer delivered to you. So you know, that's how 275 00:11:54,520 --> 00:11:56,760 Speaker 4: we took that save Erica model that for you know, 276 00:11:56,800 --> 00:11:59,760 Speaker 4: twenty million consumers use two hundred million times a quarter. 277 00:12:00,040 --> 00:12:02,400 Speaker 3: Turn it internal and so there's all. 278 00:12:02,280 --> 00:12:04,760 Speaker 4: These applications and we think it has high application for 279 00:12:05,240 --> 00:12:07,760 Speaker 4: the services business that Bank of America's in and the 280 00:12:07,760 --> 00:12:10,000 Speaker 4: ability to keep doing work. And in the end of 281 00:12:10,040 --> 00:12:13,240 Speaker 4: the day, we'll have teammates who will harness it and 282 00:12:13,280 --> 00:12:15,920 Speaker 4: take it and use it to their advantage to make 283 00:12:15,960 --> 00:12:17,600 Speaker 4: themselves even more successful. 284 00:12:17,679 --> 00:12:19,720 Speaker 3: So you know, we talk to teammates, we say. 285 00:12:19,559 --> 00:12:22,800 Speaker 4: Embrace this, let's drive it, and then let's figure out 286 00:12:23,160 --> 00:12:25,120 Speaker 4: you know, what jobs are, what job you're going to do, 287 00:12:25,160 --> 00:12:26,400 Speaker 4: but you're going to need this to be able to 288 00:12:26,400 --> 00:12:27,520 Speaker 4: do any job in this company. 289 00:12:27,760 --> 00:12:30,040 Speaker 2: As you move forward with our visual intelligence, is it 290 00:12:30,200 --> 00:12:32,800 Speaker 2: changing what you're looking for and the people coming in 291 00:12:32,800 --> 00:12:34,240 Speaker 2: the door, the entry level people. 292 00:12:37,040 --> 00:12:39,160 Speaker 4: Now we're just in the process of bringing in our 293 00:12:39,160 --> 00:12:40,640 Speaker 4: two thousand plus kids. 294 00:12:41,920 --> 00:12:44,280 Speaker 3: New hires that just started Hick this week. So think 295 00:12:44,280 --> 00:12:44,640 Speaker 3: about that. 296 00:12:44,679 --> 00:12:48,360 Speaker 4: Two thousand kids arrive one percent of applications and less 297 00:12:48,360 --> 00:12:50,240 Speaker 4: than one percent we're accepted. So weet one hundred and 298 00:12:50,240 --> 00:12:53,320 Speaker 4: tinety thousand applications and a lesson and around two thousand 299 00:12:53,320 --> 00:12:55,880 Speaker 4: people coming in. So we're getting the best of the brightest. 300 00:12:56,120 --> 00:12:59,640 Speaker 4: We love them, they're coming in. The point I'm making 301 00:12:59,720 --> 00:13:01,520 Speaker 4: is there is a group that has to use computer 302 00:13:01,559 --> 00:13:04,079 Speaker 4: skills and data skills, and that that's once, I think, 303 00:13:04,200 --> 00:13:06,240 Speaker 4: but everybody has to be able to use AI to 304 00:13:06,240 --> 00:13:08,559 Speaker 4: help them be a better employee at Bank of America. 305 00:13:08,679 --> 00:13:11,880 Speaker 4: So as you think about that, you know every teammate 306 00:13:11,920 --> 00:13:14,199 Speaker 4: and I have high confidence kids coming out of colleges 307 00:13:14,240 --> 00:13:15,800 Speaker 4: are going to be a lot better AI than you 308 00:13:15,840 --> 00:13:17,960 Speaker 4: and I might be, David, but we'll catch up to 309 00:13:18,000 --> 00:13:18,520 Speaker 4: them someday. 310 00:13:18,920 --> 00:13:21,880 Speaker 2: One last question, Brian, you've said that you're moving towards 311 00:13:21,920 --> 00:13:25,240 Speaker 2: stable coin, as some other banks are as well. You 312 00:13:25,280 --> 00:13:27,800 Speaker 2: saw mister Bailey, who's the Government Bank of England, really 313 00:13:27,800 --> 00:13:30,240 Speaker 2: said that might have systemic risks because they take some 314 00:13:30,240 --> 00:13:32,280 Speaker 2: of the money out of the banking system. You're better 315 00:13:32,360 --> 00:13:34,120 Speaker 2: off going in a different direction. Are you worried about 316 00:13:34,120 --> 00:13:36,040 Speaker 2: systemic risks from stable coin? 317 00:13:37,600 --> 00:13:41,480 Speaker 4: So one of the questions, and I think what mister 318 00:13:41,520 --> 00:13:44,400 Speaker 4: Bailey was talking about is a question. I think the 319 00:13:44,440 --> 00:13:46,800 Speaker 4: banking system the United States, a policy makers have to 320 00:13:46,800 --> 00:13:49,760 Speaker 4: think about, which is think about the money market mutual fund. 321 00:13:49,800 --> 00:13:52,440 Speaker 4: About six trillion dollars of deposit banks moved to money 322 00:13:52,480 --> 00:13:55,440 Speaker 4: market mutual funds, and their utility was to invest in 323 00:13:55,480 --> 00:14:00,360 Speaker 4: short term you know, deposits, treasury bonds, et cetera, commercial paper. 324 00:14:00,400 --> 00:14:02,640 Speaker 4: They can't invest long term, so their ability to help 325 00:14:02,640 --> 00:14:05,720 Speaker 4: the economy is really a limited amount. That six trillion 326 00:14:06,160 --> 00:14:08,280 Speaker 4: is outside the system. If you said we're going to 327 00:14:08,320 --> 00:14:10,480 Speaker 4: take the eighteen trillion or whatever is the banking syst today, 328 00:14:10,520 --> 00:14:12,439 Speaker 4: another six trillion out, you have to think through the 329 00:14:12,480 --> 00:14:15,320 Speaker 4: pol cerifications because to keep it stable you have to 330 00:14:15,320 --> 00:14:17,880 Speaker 4: have it invested in a very narrow place. And I 331 00:14:17,920 --> 00:14:20,800 Speaker 4: think that's what mister Bailey was talking about. 332 00:14:20,960 --> 00:14:23,280 Speaker 3: I think that dialogue is going on now. 333 00:14:23,640 --> 00:14:25,800 Speaker 4: There's another side of this, which means those deposits will 334 00:14:25,800 --> 00:14:28,440 Speaker 4: come back in the system if we hold the deposit's 335 00:14:28,960 --> 00:14:33,560 Speaker 4: effectively an escrow custody for our customers who are out 336 00:14:33,560 --> 00:14:35,800 Speaker 4: engaging stable coins. So I think there's a lot of 337 00:14:35,800 --> 00:14:37,720 Speaker 4: turns in the track between where we are today and 338 00:14:37,720 --> 00:14:40,680 Speaker 4: where we might be on this. Our view is pretty simple. 339 00:14:42,000 --> 00:14:44,920 Speaker 4: Ten years ago you would have said the clients don't 340 00:14:44,960 --> 00:14:46,880 Speaker 4: need a thing called zel and now they use it, 341 00:14:47,920 --> 00:14:50,240 Speaker 4: you know, twice as much as they use checks, and 342 00:14:50,640 --> 00:14:53,120 Speaker 4: it is used more times than the amount of checks 343 00:14:53,160 --> 00:14:56,040 Speaker 4: written by our consumers in amount of cash transactions, taking 344 00:14:56,080 --> 00:14:56,640 Speaker 4: the cash. 345 00:14:56,400 --> 00:14:56,840 Speaker 3: All of the ms. 346 00:14:56,840 --> 00:15:01,080 Speaker 4: So it's become the dominant payment network for consumers outside 347 00:15:01,080 --> 00:15:04,800 Speaker 4: of card that didn't exist ten years ago. So we've 348 00:15:04,840 --> 00:15:07,080 Speaker 4: got to have the consumers adopt us. If they want it, 349 00:15:07,240 --> 00:15:09,960 Speaker 4: we'll build it and they'll use it. And if it's 350 00:15:10,000 --> 00:15:13,680 Speaker 4: a way to transact, we'll be there to help them transact. 351 00:15:14,000 --> 00:15:16,240 Speaker 4: We think, you know, small bounce, cross border transfers in 352 00:15:16,280 --> 00:15:19,400 Speaker 4: app sort of patient purchases, all these types of things 353 00:15:19,440 --> 00:15:21,600 Speaker 4: and applications for but the end of the day, it's 354 00:15:21,640 --> 00:15:24,040 Speaker 4: our customer who needs to say, I want to move money, 355 00:15:24,040 --> 00:15:26,040 Speaker 4: I want to move money into euro euros, I want 356 00:15:26,080 --> 00:15:27,280 Speaker 4: to move money into stable coin. 357 00:15:27,560 --> 00:15:28,680 Speaker 3: So we've got to be able to do both. 358 00:15:28,880 --> 00:15:31,320 Speaker 2: For Brian, great pleasure to talk to you, Thanks again 359 00:15:31,360 --> 00:15:33,720 Speaker 2: on a busy day for joining us. That is Brian moynan. 360 00:15:33,880 --> 00:15:36,440 Speaker 2: He is Chairman and CEO of Bank of America. 361 00:15:36,480 --> 00:15:38,720 Speaker 1: And now back to you, thanks so much. That of 362 00:15:38,720 --> 00:15:42,040 Speaker 1: course is David Weston of Bloomberg Wall Street. We catch 363 00:15:42,080 --> 00:15:45,720 Speaker 1: new episodes every Friday at six pm Wall Street Time 364 00:15:45,800 --> 00:15:48,360 Speaker 1: on Bloomberg Radio and television. Also a big thank you, 365 00:15:48,440 --> 00:15:51,160 Speaker 1: of course, to Brian moynihan for joining us there as well.