Episode summary
Bank of America Sheds $22 Billion in Value; Consumer Prices Ramp Up | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · Hosts: Carol Massar, Tim Stenovec · Guests: Brian Moynihan, Mike McKee, Mandeep Singh, Kelly O. Kay, Jeff Sanders
Summary
Bank of America CEO Brian Moynihan defended the bank after a regulatory fine and weak trading results, arguing that the remediation costs are already embedded in expenses and that investors should not expect further surprises. He said the bank’s core engine is still strong, pointing to loan growth, deposit growth, and a rising net interest income outlook that he said now supports 8% plus growth in 2027 after earlier guidance of 5% to 7%.
The conversation broadened into the effect of higher rates, sticky deposits, and the threat and promise of AI. Moynihan said higher rates are a net positive for Bank of America so long as they are not tied to a worsening economy, and he framed transactional deposits as essential to the banking model. He also warned that agentic AI needs a human in the loop before payments are authorized, because mistakes and scams could scale quickly.
Later segments focused on macro inflation and the AI investment cycle. Mike McKee said September consumer prices showed inflation moving the wrong way, with broad-based pressure underneath the headline. Mandeep Singh argued the AI trade still looks strong, but said model providers are trying to slow distillation and that ASML’s sales outlook reflects both more demand and higher prices. A final discussion with Heidrick & Struggles partners explored boomerang CEOs, CEO accountability, and rising pay for scarce technical talent.
Key takeaways
- Moynihan said Bank of America has already built remediation costs into its baseline and expects no additional expense surprises from the Treasury fine.
- Bank of America raised its net interest income outlook to 8% plus for 2027, which Moynihan said reflects loan growth, deposit growth, and balance-sheet repricing.
- Moynihan said higher rates help Bank of America unless they signal a weaker economy, because the bank’s zero-interest deposits reprice slowly.
- Mike McKee said September inflation was broad-based enough to keep the Fed cautious, especially with only one CPI report before the next meeting.
- Mandeep Singh said AI demand remains strong, but distillation crackdowns and safety concerns could affect growth rates for model providers like Anthropic.
- Jeff Sanders and Kelly O. Kay said companies are increasingly favoring familiar or founder-like leaders because a bad CEO hire can cost multiple product cycles.
Notable quotes
“we now have said we've raised that now said we confirm 8% for the year and then at that same time we sort of said 5 to 7 for 27 and we just raised that to 8% plus”
“our exposure to higher rates is always positive”
“Inflation's going the wrong direction. Not what the Fed wants to see”
“I think a lot of it's about risk management and it's trying to figure out riskreward on these things”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenac.
Turmoil at BFA pushing shares to their worst earnings day in more than a decade. Piling on the pain for a bank that's already been the worst performer among the six biggest US banks in the past 5 years. It's also a major black eye for CEO Brian Moyahan.
The lawyer turned executive who has led the bank Tim for nearly two decades. Shares of Bank America trading lower after its earnings update showed stock and fixed income traders missed estimates. The bank's results also hurt by a charge tied to regulatory penalties over money laundering and sanctions violations.
Well, right now we head to Charlotte, North Carolina, the home of Bank of America, and that's where CEO Brian Moan is sitting down with Bloomberg's John Pharaoh. John,
We'll start here in New York. Carol, thank you very much. And thank you very much to Tim as well.
I'm pleased to say that the Bank of America chairman and CEO Brian Moahan joins us now for more. Brian, welcome to the program. It's good to see you as always.
There's a couple of different stories in the mix today. We've got to start with that chunky fine from Treasury. A big regulatory fine that we can address with you straight away this afternoon.
The language from Treasury is quite damning, Brian. What's your interpretation of what went wrong here?
Look, at the end of the day, we had an examination a few years ago.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- consumer price inflation
- bank earnings
- rates and fixed-income markets
- tech research
- pre-ipo fundraising
Companies and tickers mentioned
- BAC
- Bank of America
- Anthropic
- Heidrick & Struggles
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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