BANK’S CEO SEES CHANGES
Consumers’ reliance on tech pushing changes in services, facilities
Bank of America CEO Brian Moynihan was in town this week to meet with clients, investors and employees from some of the company’s 113 local branches.
His visit comes at a time when the future of traditional bank branches is on the minds of industry executives as they respond to dramatic changes in technology and consumer banking habits.
Moynihan took half an hour to discuss those issues, and to give his early impressions
of the new presidential administration, with the Chronicle. Following are excerpts, condensed and edited.
Q: What new things can we expect in Houston?
A: We continue to invest in business bankers and commercial bankers and small-business bankers here in Houston. Over the next three or four years, all the branches get redone (nationwide), and Houston will have its share of that.
Q: What should we
expect at these redone branches?
A: You go from what would look more like a traditional bank branch to a place where you have Merrill Lynch, U.S. Trust and business banking all around the same location. You have mortgage loan officers and small-business bankers there, too. The teller lines are one or two positions, and there’s a ton more technology, tablets to interface with. It just looks very different. They’re destination centers as opposed to convenient transaction centers. That’s the major thing. So when people come to see us, they’ll come longer distances for very important matters. What they won’t do is come long distances to deposit checks.
Q: Why is it important that Bank of America invests in mobile banking?
A: If I took your phone away from you, you’d be lost, right? You conduct your life through your phone or through your digital interfaces, maybe a computer or an iPad, and our goal is to really be there for the clients. And the amount of activity represented by the mobile platform today is the same, if you think about it in terms of depositing checks, that 900 branches do. It’s had a big impact.
Q: How is Bank of America’s energy exposure?
A: The credit quality has improved over the four quarters of 2016. Late ’15, prices fell. The issues started to emerge. By the end of first quarter of ’16, we peaked in terms of charge-offs, and it has been coming down ever since. That being said, the exposure and the nonperformers in that area are still higher than we want, so we expect that to keep improving during 2017.
Q: Would you say the banking industry is undergoing a period of change driven by technology and President Donald Trump’s administration?
A: It will always be changing because customers change. Customer behaviors change, customer needs change, the markets change, the competitive sets change. Is it a particularly changing time? I’d say maybe, but frankly we’ll figure that out 10 years from now when the next changing time will be. We are not standing still. We are driving this company to be the best it can be across eight lines of business and the products and capabilities they have.
Q: How does Bank of America feel about President Trump’s executive order to begin rolling back DoddFrank regulations?
A: After the economic crisis and financial crisis, there were a lot of things put in. You had a series of choices that were made that regulated different activities that we believe were the right things, brought everybody under the tent. Everybody was regulated who made mortgage loans as opposed to just the banks, etc. And then there’s a fair debate on: Are some of the things more than might be needed?
Q: How do you feel about the Trump administration overall?
A: If you look at the statistics about consumer confidence or business confidence, they’ve risen since the election. That enthusiasm is just a good thing because consumers are doing more. We saw consumers in January 2017 spend 5 percent plus more than they did in January 2016. We’re seeing that continue into February. In the early part of this quarter, the companies are borrowing more. We’re seeing good activity. And the markets … there’s just very strong activity. Largely because people are optimistic that there will be progrowth, lower tax, lowregulation policies. At the end of the day, what’s good for America is going to be good for Bank of America. We benefit from the same trends.