BofA CEO Brian Moynihan: We'll Work To Provide Transparency, Fair Pricing To Customers
(Rick Rothacker) - Bank of America Corp learned a lesson from its abandoned debit card fee and will work to provide transparency and fair pricing to customers while producing a return for shareholders, Chief Executive Brian Moynihan said on Tuesday.
The bank and its peers are updating product offerings even as they "address new regulations that have reduced our revenues in this business," Moynihan said in opening remarks at the Bank of America Merrill Lynch Banking and Financial Services Conference.
Bank of America, the No. 2 U.S. bank, faced a backlash from customers and politicians after it disclosed plans in September to charge customers a $5 monthly debit card fee. As other banks retreated from such charges, Bank of America canceled plans for the fee a month later.
Consumer banking will become a "smaller platform" at Bank of America and derive its profitability from lower expenses and deeper relationships with customers, Moynihan said. Bank of America is testing new account packages where customers won't pay fees if they do significant business with the bank, he said.
Customers can avoid fees by using direct deposit for their paycheck, using a Bank of America credit card or taking out a mortgage with the bank, he said.
Moynihan also addressed the bank's efforts to boost its capital levels ahead of new international rules. He called a plan disclosed last month to issue up to 400 million common shares in exchange for outstanding preferred shares a "prudent way to manage capital." The move will boost capital levels and reduce the bank's interest payments, but will also dilute the holdings of current stock holders.
On Tuesday, Bank of America began asking certain security holders for their consent to a procedural maneuver required as part of the exchange.
In another move to build capital, Bank of America on Monday said it was selling most of the remaining shares it owns in China Construction Bank Corp to generate a gain of about $1.8 billion after taxes.
Moynihan said the 1 percent stake Bank of America will still own in CCB remains its largest private-equity investment. "It's a great company and we will continue to support it," he said.
(Reporting by Rick Rothacker in Charlotte, North Carolina; editing by John Wallace)
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