Brian T. Moynihan: BofA has spent $35B on tech over 10 years

Friday 24 January 2020 at 12:27
Friday 24 January 2020 at 12:27
Bank of America CEO Brian Moynihan

FOX Business anchor Maria Bartiromo’s sit-down interview today with Bank of America Corp (NYSE:BAC) CEO Brian T. Moynihan. The interview took place from the World Economic Forum in Davos, Switzerland and aired on FBN’s Mornings with Maria (weekdays 6-9AM/ET).

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During the interview, Moynihan discussed the $35 billion worth of technology he has purchased for the company in his role as CEO, the new $20 an hour minimum wage being implemented for all employees, and more. Moynihan also said that new international trade deals such as USMCA and China trade deals, provide “good business, more certainty.”

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Bank of America has spent $35B on tech over 10 years: Brian T. Moynihan

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Full Rushed Transcript:


Well, the head of the nation's largest retail bank is expecting a strong 2020. Here's Bank of America's CEO, Brian T. Moynihan earlier this week.


BARTIROMO: Let's talk banking and really, the economy because you have such a great vantage point in terms of where -- how we're doing -- the largest retail bank -- retail to consumer. Tell me how the consumer is looking to you today.

BRIAN T. MOYNIHAN, CEO, BANK OF AMERICA: Well, starting with last year, just to give people a point of reference, it grew -- it grew about 5 1/2 percent to six percent over the year before, which grew at 8 1/2 percent over the year before. So you had two strong years of growth.

This year, so far, in the first couple of weeks, we're seeing consistent with last year. And the good news during '19, each quarter got stronger. And so, across Bank of America consumers in '19, there was $3 trillion of money spent on credit cards, debit cards, checks out the door, bill payments, P2P -- things like that.

And growing at five percent-plus is consistent with the two percent-plus growth GDP in the United States when you look back. Eight percent was at three percent. Five to six percent at two percent level. So we feel very confident that the U.S. economy is on a good plane.

BARTIROMO: Well, tell me about the consumer, though, in terms of their balance sheet.


BARTIROMO: In terms of paying back loans. Does it feel like it's a healthy situation?

MOYNIHAN: Well, in the prime space where we concentrate, our delinquencies are -- have been five years. Our charge-offs are under 40 basis -- around 40 basis points on a core basis. The delinquencies are down.

And so, the prime borrower is in very good shape. Why, because they're employed and their wages are rising.

I think housing has a good room to move here. There's an undersupply of housing and it's hard to build because of labor shortages.

And so, that shouldn't rocket. We don’t want it to do that. The debt will help extend because remember how many people are involved in a house build and how many local -- it's all local. You can't import a built house. I mean, theoretically, you can but it's hard.

So we feel --

BARTIROMO: So, housing is strengthening right now?

BRIAN T. MOYNIHAN: We feel good about housing. We feel good about the car business. We feel good about the auto business. And all in a prime space -- the consumer. And they have -- as we watch originations come on, the quality is as strong now as it was a couple of years ago, and that's good.

BARTIROMO: But aren’t the auto -- the auto areas is shaky when you look at auto lending in some corners -- maybe not prime.

MOYNIHAN: It did -- that's the question. We made a commitment to responsible growth many years ago, so we stay in the prime space because that's consistent with our brand, our capabilities, how we think about consumers. And also, the stability of our company and ability to earn through any recessions.

BARTIROMO: How much are you spending on technology? Tell me what it has gotten you. What has it yielded you?

BRIAN T. MOYNIHAN: Well, in the decade I've been CEO, the pure technology code has been probably $35 billion. Some of that goes to doing work to upgrade the systems, and we've upgraded all of them across the last 10 years. Replaced every one of them except for systems that didn’t exist that we couldn’t find, and we just kept investing in them.

Some of it comes from feature functionality. Take the mobile banking. Yes, we've probably been putting in the online mobile banking space $1 billion over the last decade, at least of spending, to make it better and better and make it a good feature functionality. But importantly, be secure and to scale.

BARTIROMO: Well, I think this is a really important point in terms of scale because that's why some of your competitors -- the regional banks -- are being forced to merge right now.


BARTIROMO: They're being forced to either create their own scale or they'll die --


BARTIROMO: -- because of the strength of B of A. Some of your competitors, JPMorgan, as well.

Are you expecting more regional mergers?

MOYNIHAN: Well, as a person who has spent -- you know, starting in the early 90's and even as a lawyer before that --

BARTIROMO: You lived it.

MOYNIHAN: -- this is what I did. And the wonderful thing to run our company now compared to my -- all those predecessors from all the prior companies -- we can't do any deals, so I don’t have to think about that. It's illegal in the United States for us to consolidate through acquisition anymore.

BARTIROMO: You can't add to your deposits.

BRIAN T. MOYNIHAN: Exactly. So -- but as an investment banker, the old M&A guy -- look, the consolidation powers there, we always think it's going to happen faster than it does. And you saw some meaningful sized deals obviously, with the truest transaction last year in the First Horizon.

There's deals happening but it -- those are always tricky because it takes the stars to align. But the fundamental basis -- the fundamental reasons to do it are there.

And it's -- that's -- you know, the Schwab transaction -- these are all about building more scale.

BARTIROMO: But what about the pressure coming from something like a Schwab merger? I mean, you see Vanguard dropping fees to zero, Schwab dropping fees to zero. How is that impacting the business at Merrill Lynch?

MOYNIHAN: So, our Merrill Lynch has about $250 billion in assets and debts -- not Merrill -- that's Merrill Edge. It's for more general public -- more mass market. It grew by $40 billion over the last year in terms of flows -- $24 billion of flows, $40 billion in growth for the market. It's a great business.

So we're already a big enough business. We're already adding a lot of assets. But we don’t do any business as a standalone business. We have consumer business.

And for investment for the general consumer that is Merrill Lynch. For investment for the wealthy consumer, that's Merrill and the private bank. And so you have this -- what makes us unique as a competitor is we have all of it.

BARTIROMO: Tell me about the Fed because when we first came out with the -- when they first came out with the stress test people were thinking well, you know, it's too much capital that we're putting aside. It's too much in terms of these aggressive predictions. But in the end, I think it's actually been helpful.

BRIAN T. MOYNIHAN: I think going back to the crisis and being here and talking to the global regulators, and we have these meetings in rooms where everybody will be waiting outside to think if we've thought of something that somebody hadn’t thought of, meaning all these very smart people.

And the reality is leverage and ill-preparedness for recession were the two big issues. So the stress tests really are the people who -- that show you that what it would be like to hit a recession and go through it.

BARTIROMO: What kind of a year are you looking for?

BRIAN T. MOYNIHAN: I'm looking for another good year in the U.S. -- about 1.7 percent GDP growth -- a little above three around the world. I think there's -- this is one of those years where there's some risk to the upside is things they're solving toward the end of the year -- debt, trade deals, the trade situation.

Think about USMCA, think about China, think about Japan. There's trade deals falling in place -- good business, more certainty.

And we need -- we need businesses -- they're coming back off the bottom in terms of investing. They've went down. They still are positive, still growth, but slowed down and now we've got to get back in. And I think the certainty around that will be helpful.

I think the election cycle will create interesting questions. It always does.

BARTIROMO: Do you have plans -- what have you planned in terms of Merrill Lynch in London and the U.K. given the Brexit situation?

BRIAN T. MOYNIHAN: Well, we didn’t wait for them to figure out the final because you couldn’t because you weren’t sure whether it could drop on your head on a given day. So we moved our broker-dealer activities in Europe to Paris and we moved our bank activities to Dublin. And then we have our London-based activities -- broker deals still there and it's a branch of the U.S. Bank. So we're done with that.

BARTIROMO: Tell me about what's most prevalent among your clients.

BRIAN T. MOYNIHAN: Everything. That's the --

BARTIROMO: They want to do everything online -- digital.

BRIAN T. MOYNIHAN: Well, everything online and everything personal. And they write checks. Our clients and consumers wrote 700 million checks last year and that down 10 percent. The dollar volume was actually up. So, all those checks are going through the system.

And when you speak to a lot of foreign countries they don’t know what a check is. But we still write them in the United States.

BARTIROMO: That's funny.

BRIAN T. MOYNIHAN: And so -- and so everybody uses everything. So the mobile interactions are growing at 15-20 percent a year. The number of mobile customers grew at 10 percent of the year, which is growing up a huge base.

BARTIROMO: And you made an important announcement in terms of sustainability. Tell me where you're allocating money there.

MOYNIHAN: First, we are carbon neutral today and that was a commitment we made by 2020. We actually got there at the end of last year but we're already there.

And then the second major commitment is we -- we've always had environmental commitments in terms of business -- in terms of generation business -- green bonds and financing's and solar installation.

So we had committed $125 billion about five years ago for 10 years. We finished it in four. And so we said OK, let's figure out where we're going next. So the next 10 years we've committed $300 billion of environmental funding -- financing to help make the transition happen on a rational way.

And so we're helping finance solar, wind, and also other types of technologies that are actually making even the current fossil fuels more efficient and more effective, and that's good for the environment.

BARTIROMO: You made the commitment to raise the minimum wage. You said you were going to get to $20.00. You're at $20.00?

BRIAN T. MOYNIHAN: Yes. So, last year, I would have interviewed and talked about going $17.00, $18.50, $20.00 over two years. We looked at it and said the pressure on us to get the great people we need, the company we want to be, we went ahead and went to $20.00.

So this quarter, then March, all the teammates at Bank of America will start at $20.00 or more, even if you're a summer intern, even if you're a high school kid you start at $20.00 and go up from there.

BARTIROMO: Fantastic.

Brian, thank you.


BARTIROMO: My thanks to Brian T. Moynihan, CEO of Bank of America.

Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver


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