BofA CEO says business outlook is brighter under Trump, expects surge in banking, trading revenue

By Saeed Azhar, Lananh Nguyen and Arasu Kannagi Basil

(Reuters) – Bank of America expects regulatory changes under President-elect Donald Trump to favor mergers and acquisitions among companies, including banks, CEO Brian Moynihan said on Wednesday. “Regulatory changes will be favorable for the ability to get deals done,” Moynihan told investors at the Goldman Sachs Financial Services conference.

His comments echoed bullish commentary from rivals across Wall Street, including Goldman Sachs and JPMorgan this week.

Equity capital markets are seeing a little more activity, which will ultimately boost initial public offerings, Moynihan said.

“That’s going to take a little bit of sort of valuation alignment ultimately for the IPOs to get out, do well, and then others will follow,” he said.

The bank could see a 25% rise in investment banking fees in the fourth-quarter from a year earlier, while wealth management fees could grow 20%, Moynihan said. Trading revenue could hit a record, he said.

Moynihan said he felt confident about fourth-quarter target for net interest income (NII) – the difference between what they earn on loans and pay out for deposits. That number will continue to grow in 2025, he said.

The bank had forecast NII to be $14.3 billion or above in the fourth quarter.

“We’re seeing loan growth so far that would analyze out to 4%, 4% plus, better than what we see in the industry… So we’re growing faster in the economy,” he said.

The consumer was resilient and businesses were doing well, Moynihan said.

The recent rally in bank stocks is “really, really rational,” the CEO said, drawing laughter from attendees.

He cited the U.S. interest rate and growth outlook as constructive factors for the industry.

Shares of Bank of America are up about 36% year-to-date.

The second-biggest U.S. bank has benefited from consumers’ robust financial health, which has spurred spending and drawn in interest payments in recent quarters. The lender derives 39% of its net income from its consumer business.

U.S. banks could fare even better in months to come. Moody’s Ratings recently changed its global outlook for banks to stable from negative, as stable economic growth and lower interest rates keep borrowers on track.

(Reporting by Saeed Azhar in Toronto, Lananh Nguyen in New York and Arasu Kannagi Basil in Bengaluru)