Bank of America CEO on $1.2 billion fine: We’re on the right course to remediate everything

BILLION FINE FROM THE TREASURY DEPARTMENT THAT WAS TIED TO ANTI-MONEY LAUNDERING PRACTICES. LESLIE PICKER JOINS US NOW, AND SHE HAS HER GUEST, OF COURSE, IS BANK OF AMERICA'S CEO, BRIAN MOYNIHAN. LESLIE. >> DAVID. >> THANK YOU. AND, BRIAN, THANK YOU FOR TAKING THE TIME. THERE'S A LOT TO GET TO THIS MORNING, BUT WE'LL START ON THAT POINT THAT DAVID JUST LAID OUT, TREASURY SAYING THAT B OF A FAILED TO REPORT MORE THAN $5 BILLION IN SUSPICIOUS TRANSACTIONS, AND YOU SIGNED A CONSENT ORDER IN 2024 TO FIX ALL OF THIS. AND REGULATORS SAID THAT THE PROBLEMS CONTINUED AFTER THAT. WHAT DO YOU THINK BROKE DOWN AND HOW CLOSE IS THE FIRM TO FIXING IT? >> WELL. >> WE PUT. LOTS OF RESOURCES AGAINST THIS. >> THOUSANDS OF EXTRA TEAMMATES. WE'VE LOWERED THE THRESHOLDS OF REPORTING THAT YOU CAN SEE REFLECTED IN SOME OF THE TECHNICAL AREAS. IT TOOK US A WHILE TO GET EYE TO EYE WITH THE REGULATORS ABOUT WHAT EXACTLY THEY WANTED OUR ROLE TO BE, BECAUSE WE FILE A LOT OF SARS. AND SO THE GOOD NEWS IS THE PENALTY WENT THROUGH LAST QUARTER. THE GOOD NEWS IS WE'VE BUILT UP THE RESOURCES AND ARE DEEP INTO REMEDIATING ACTIVITIES, AND WE'LL RESOLVE IT LIKE WE'VE DONE WITH MANY ISSUES IN THE PAST IN THIS COMPANY. IT'S ONE OF THE THINGS WE KNOW WHAT TO DO. THERE WAS A BIT OF A TIME WHERE WE WENT BACK AND FORTH ABOUT WHAT THE RIGHT ANSWER WAS, AND THAT'S BEHIND US, AND WE'RE MOVING FORWARD. >> YOU'VE SAID THAT THE REMEDIATION EFFORTS ARE ALREADY BAKED INTO YOUR RUN RATE EXPENSES AT THIS POINT IN TIME, BUT AS PART OF THE CONSENT ORDER, THE NEW ONE CONSULTANTS WILL BE REVIEWING TRANSACTIONS GOING BACK FOUR YEARS TO 2022. CAN YOU RULE OUT ADDITIONAL PENALTIES OR REGULATORY ACTIONS THAT COULD STEM FROM THAT? LOOK BACK. >> THE LOOK BACKS THAT THEY'RE TALKING ABOUT ARE OBVIOUSLY IN THE PROVISIONS, BUT WE'VE ALREADY HAD TO DO LOOK BACK FOR PERIODS OF TIME AND AND THE THRESHOLDS. IT'S A VERY TECHNICAL THING. BUT SO WE'RE CONFIDENT THAT WE ARE ON THE RIGHT COURSE TO REMEDIATE EVERYTHING. AND THE WORK IS GOING ON. AND WE'VE WHEN I SAY IT'S IN THE RUN RATE ON EXPENSE. WHAT I MEAN IS IN THE THIRD QUARTER AND IN THE FOURTH QUARTER, EXPENSES ARE FLAT. AND IN THE IN THE CURRENT QUARTER, WE'LL HAVE 200 PLUS MILLION DOLLARS OF INCREMENTAL EXPENSES GOING AGAINST THE RESOLUTION. AND SO AS WE'VE SAVED MONEY IN OTHER PARTS OF THE COMPANY, WE'VE DEPLOYED IT OVER HERE. AND AS WE GET THIS IRONED OUT AND GET THROUGH THE PROCESS, WE'LL TAKE THOSE EXPENSES OUT, BACK OUT AND PUT THEM TO OTHER USE. >> AND AGAIN, ANY SENSE OF TIMELINE FOR WHEN YOU EXPECT THIS TO ALL BE TRULY IN THE PAST? >> WELL, THERE'S TWO ELEMENTS. ONE IS WE GOT TO DO THE WORK AND THEN THE REGULATORS LOOK AT IT. SO I DON'T WANT TO SPECULATE ABOUT THE PRECISE TIMELINE, BUT WE'VE BEEN WORKING HARD ON IT FOR A GOOD PERIOD OF TIME, AND WE'LL CONTINUE TO DO SO. >> NOW, BROADLY SPEAKING, THE ADMINISTRATION HAS BEEN EASING UP ON BANKS ACROSS THE BOARD. I THINK A LOT OF PEOPLE FEEL THIS IS A DEREGULATORY ENVIRONMENT FOR THE BANKING SYSTEM. YET THE TREASURY SECRETARY PERSONALLY SINGLED OUT B OF A IN YESTERDAY'S RELEASE WITH A STATEMENT FROM SECRETARY BESSANT, WHICH IS SOMEWHAT OF A RARITY FOR SOMEONE AT HIS LEVEL IN THIS TYPE OF AN ANNOUNCEMENT. AND THEN THIS MORNING, B OF A WAS NAMED AS ONE OF NINE BANKS IN AN OCC REPORT THAT ALLEGED IT HAD ENGAGED IN BANKING ACTIVITIES ACROSS POLITICAL, RELIGIOUS AND SOCIAL VIEWS. ARE YOU CONCERNED WITH WHERE B OF A STANDS WITH THE TRUMP ADMINISTRATION RIGHT NOW? >> OH, I'M NOT CONCERNED. WE DO A GREAT JOB FOR THE AMERICA, AND I THINK ALL OF US HAVE A COMMON INTEREST IN MAKING AMERICA SUCCESSFUL. AND SO IF YOU LOOK AT OUR EARNINGS, WHAT YOU SEE IN OUR EARNINGS IS GREAT CORE CUSTOMER ACTIVITY. WE'RE THE LARGEST SMALL BUSINESS LENDER AND BUSINESS BANKER. AND THESE RULES ON THE QUESTION OF BANKING STUFF HAVE BEEN OUT THERE AND THE FAIR ACCESS LAWS, AND WE'VE BEEN ADAPTING TO THEM. SO I'M CONFIDENT THAT WE'LL ALL GET THE RIGHT PLACE. >> LET'S LET'S TURN TO EARNINGS BECAUSE YOU CAN SEE THEIR SHARES ARE DOWN ABOUT 8% TODAY. THE STREET IS IS REALLY FOCUSED ON SOME UNDERPERFORMANCE IN TRADING AND BANKING. THAT'S KIND OF THE WALL STREET SIDE OF THE BUSINESS. IS THIS A RESULT OF KIND OF PRODUCT MIX AGAINST THE CYCLE. OR DID YOU LOSE MARKET SHARE IN THE QUARTER? AND I ASKED BECAUSE, YOU KNOW, IT WAS A BIT A BIT OF A MIXED QUARTER ACROSS THE BOARD, BUT THERE WERE SOME OF YOUR PEERS WHO DID SEE IMPROVEMENT IN SOME OF THESE BUSINESSES. >> YEAH. SO I THINK YOU HAVE TO SORT THE BUSINESSES. SO WE HAVE FOUR SEGMENTS. WE REPORT WE EARNED $8 BILLION AT THE BUSINESS LINE LEVEL. CONSUMER EARNED 40 PLUS PERCENT OF IT, THE WEALTH MANAGEMENT BUSINESS EARNED 20%, AND THE COMMERCIAL BUSINESS AT ABOUT 20%. AND, YOU KNOW, SO THAT LEAVES THE MARKETS BUSINESS, WHICH IS ONE OF THE SMALLER BUSINESSES OR ABOUT A BILLION AND CHANGE, WHICH IS A GOOD PERFORMANCE. IT'S SOLID PERFORMANCE. THEY HAD 17 QUARTERS OF YEAR OVER YEAR GROWTH. THIS QUARTER WAS ONE OF THE BEST QUARTER. THIRD QUARTER OF 2026. IT WAS ONE OF THE BEST THIRD QUARTERS THEY HAD. BUT THE REALITY IS OUR STRENGTH, BOTH FROM AN UNDERWRITING SIDE AND FROM A TRADING SIDE, IS AROUND FIXED INCOME. AND WE HAVE A MUCH BIGGER FIXED INCOME BUSINESS RELATIVE TO OUR EQUITY BUSINESS. SO OUR EQUITY BUSINESS GREW DOUBLE DIGITS, ETC. BUT THE FIXED INCOME MIX IS WHAT IMPACTED US. WE MADE MONEY TRADING DURING THE QUARTER, $5 BILLION PLUS. WE MADE MONEY MOST DAYS, BUT WHEN RATES GO UP THAT MUCH, CLIENTS FROZE AND THAT ACTIVITY SLOWED WAY DOWN. AND WE WE TOOK THE HIT FOR THAT. THAT MIX DIFFERENCE IS PART OF THE EXPLANATION. AT THE END OF THE DAY, WE CONTINUE TO MAKE GOOD MONEY. AND I THINK IF YOU LOOK AT THE WHOLE COMPANY, THE REVENUE GROWTH 30 BILLION UP 3%, THE THE EXPECTATION 8% FOR THIS YEAR NOW UP FROM 5 TO 7% PREVIOUSLY TO 8% NEXT YEAR. WE INCREASED OUR GUIDANCE FROM 5 TO 7% TO 8% PLUS. THAT IS THE CORE ENGINE OF THE COMPANY KICKING IN. AND AND THE NICE THING ABOUT BANK OF AMERICA IS WE HAVE A BALANCE OF BUSINESSES ACROSS THE CLASS OF WHAT