Bank of America Corporation (BofA), the second largest bank in the United States, is dead set on boosting its consumer market share in the wake of pervasively low interest rates that won't get any higher this year.
CEO Brian Moynihan asserts BofA can double its consumer market share in the United States. He emphasized this growth will only take place in the U.S. and not overseas. Moynihan didn't give a timeline for his plan to double the bank's consumer market share.
Bolstering Moynihan's confidence is a strong balance sheet with billions in excess liquidity; deposits growing above the industry rate, and a low-risk loan portfolio. Taken together, these factors are pluses for BofA that will allow it to take consumer banking market share from rival banks. Consumer banking is BofA's biggest business.
"Our market share in consumer is probably 12, 13, 14 percent, depending on who counts ... The reality is, you could double that," according to Moynihan in an interview with the Financial Times. He noted in an awkward comparison that some auto, soft drink and beer companies had massively more consumer share than his bank.
Moynihan has no fears of any regulatory backlash from the federal government, which has been wary of the immense power of big banks in the past. He made this remark when asked if the greater concentration in banking is good for customers or likely to receive more scrutiny from regulators.
"If we do a good job for the customers and clients and we're fair in our pricing, I think that's good because ... the scale that we have enables us to do more for the customers," he said.
Moynihan explained he isn't looking overseas for retail growth because it will take years for BofA to achieve a market share capable of giving it material deposits or revenue. He believes doubling BofA's retail business might be possible without opening more branches. He also sees strong growth in online products and services.
Analysts said Moynihan isn't planning to expand overseas to achieve retail growth since the bank's wealth management division's recently abandoned international markets due to an inability to achieve profitability. Moynihan also believes foreign diversification won't strengthen the bank during future economic challenges.
"There isn't going to be enough to offset a U.S. recession in what we could do outside the United States because . . . (the) U.S. is so big," according to Moynihan.
