Bank of America (BAC) Barclays 22nd Annual Global Financial Services Conference 2024 summary

Consumer and corporate trends

• Consumer spending growth slowed from double digits in early 2023 to 3%, then stabilized at 4%, mirroring pre-pandemic levels, with lower-end consumer deposits slightly up year-over-year.

• Corporate and small business loan balances are stable, with growth in small business, but overall loan utilization remains below pre-pandemic levels due to higher borrowing costs and economic uncertainty.

• Companies are delaying purchases, awaiting clarity on rates and demand, with credit quality remaining strong across segments.

Business model, growth, and integration

• Income is balanced between consumer/wealth and corporate/institutional businesses, allowing for capital optimization and risk mitigation.

• Organic growth opportunities exist in consumer banking, wealth management, and commercial lending, with significant room to expand market share in each.

• Internationally, commercial banking, investment banking, and capital markets have seen a fivefold increase in loans over the past decade, with deeper client engagement in established markets.

• Integration across business lines and markets is a competitive advantage, driving cross-sell and supporting above-industry growth rates.

Financial performance and outlook

• Loan growth is modest at 0.75% quarter-over-quarter, with commercial and card lending showing relative strength; demand is expected to improve with rate cuts and policy clarity.

• Deposits have grown $80–$100 billion since May last year, with a shift toward core deposits and plateauing deposit rates.

• Net interest income (NII) bottomed in Q2, with growth expected in Q3 and Q4, contingent on the number of Fed rate cuts; year-over-year NII growth anticipated into next year.

• Fee income is strong in wealth management, trading, and global payments; investment banking fees are flattish, while trading revenue is up for the tenth consecutive quarter.

• Credit quality is stable, with consumer delinquencies and charge-offs flattening, and commercial real estate charge-offs declining.