美银CEO：消费者支出强劲，投行管道充裕

What a fantastic start to this year. Now forgive me. With best we've got to ask, can this really continue at this rate? Oh, you just well, you just saw two statistics that I've watched carefully, which is, uh, the what the activity of consumer is and then ultimately what the unemployment claims are. That's that people argue it's leading or trailing, but it's actually the indicator of the health of the employment market and the 4.2% unemployment rate with new claims, uh, at 1.8 on, on, on, uh, long term claims and 208,000.

Everybody looks at this as well that's, you know, in line with 19. Remember that the workforce has actually grown a lot since 19 terms of size. And so you argue about 7160 million workers or something like that. So it's a pretty small number. It it's anomaly. It's a low number and percentage wise it's a low number. And that's good news because that means a consumer spending what we see in our data as a consumer. So spending the consumer spend in America, that means economy is okay.

And that probably means the rest of the markets in the construct and final demand is there. The weather for the banking industry has been shining brightly. The sun is out, the backdrops great. The environment has been good. I want to draw a distinction between the environment and execution because fees are up everywhere. What are you proud of after that quarter on execution where you kind of market share, every single business grew, the revenue grew, operating leverage, which is critical because that means the revenues grow faster expenses and increase the returns.

Every single business, it grew, the customer bases and all those things. So what you're seeing us is the power that the engine, the Bank of America, is across all the businesses. So our consumer business made 3 billion after tax this quarter. Plus you know that's a that's half as much as Wells Fargo made. And you know it's a big number. That's one of our four businesses that we disclose in the in the smallest of which made a billion and a half this quarter.

So these are big businesses are scale. They're accumulating new clients, accumulating new activity. Um the markets business had a great quarter and investment banking had a great, uh, year over year comparison. Uh, but at 2.1 billion for the quarter or 2 billion last quarter, 2.1. It looks like a huge increase because last year, second quarter, we all thought the world was coming to an end with Liberation Day. This year it's different.

Um, but what's really important is the pipeline they have is strong. The deal in discussion are strong. And you're seeing deals announced every day across all the spectrums M&A strategy, financing, all of which is important. Just elaborate on that a little bit more. How strong is this pipeline. Because things just look phenomenal. We've had a record IPO. Alphabet came out with a monster equity capital raise. We saw SK Hynix more recently do something similar.

We're going to see more of that in the year ahead. Yeah I think you know, so if you look at we and all our peers are deploying more balance sheets, our balance sheet to the markets business went up 00 billion for the quarter over what they thought they were going to be at. Just to give you a sense. And so we had that capital base and that capability just to meet the moment. But if you look at investment banking, the deal when you talk to CEOs, because if you think about this time and the amount of things they had to think about, um, we've added one, with the awards, but at that time it was.

Taxes weren't set yet. Uh, the, uh, immigration policy was the people were trying to figure it out trade trading, tariff policy and then deregulation. You come to the fall. They felt that that was sort of working through whether the tax and the tariff policy kind of looked at and said, that's sort of 10 to 15% of countries willing to do business with United States, and 50 if they're not. I can figure that out. Let me go figure out how to run my business.

Um, that comes with a court decision. All the work that's gone around in circles a little bit. So we added some uncertainty. But on top of that, what you added is a year's worth of growth at a year's worth of belief that this year is going to grow 2% plus next year is going to grow 2% plus. That's creating people, convincing people that despite higher energy prices, despite inflation, despite the fed having to keep rates higher, despite all that, the economy is growing through it.

That's the interesting part. And I think CEOs last year got cleared on taxes, got clarity on uh, deregulation. Uh, got cleared of the immigration and the now are thinking hard about. Wait. I can do things. I can see a little more distant future. Does that mean there's a parade of possibilities of the change that that's out there every day? Let's talk about the parade of possibilities. Sorry, I'm a journalist, so I have to.

There's this question, uh, about how market dependent some of this, uh, capital markets activity will be for the rest of this year. The idea that a lot of people are borrowing money they don't even need right now, because the market is so wide open to them. What are the potential thresholds, whether it's in rates or whether it's a selloff in equities that could potentially stymie some of the pipeline? So if we were here a year ago, you'd say nobody is ever going to get a mortgage at 6.5%.

Just to give you a sense, we were 30% up on production mortgages this quarter. So as people get used to environments, they start to behave differently. And so, uh, the consumer borrowing is strong. Um, but there's a lot of capacity left. Um, but, you know, mortgage production being up 30% is kind of an interesting statistic in a world where if you said rates were going to be a side, it'd be doing mortgage volume. If you go to the commercial side, which is where you were talking about, you know, we're seeing good loan growth, uh, you know, high single digits year over year and a core middle market small business area where the largest small business lender, United States.

That's good news because that means back to John's question. That's a little bit that if I'm not going to borrow, if I don't need the money, I'm not going to borrow if I don't need to do something. Um, despite what people talk about, you're not going to issue debt and increasing interest cost and have just sit there because the arbitrage if you don't issue below treasuries, which these guys no borrower does. You're going to pay 3 or 400 basis points to let money sit there.

It's just not going to work. So people are borrowing because they see opportunity where it's equipment buying was hiring lots of building a plant, whether it's inventory build up. And so they're going to be more worried about can they get the margin on that. That's the question of inflation coming through the system later on. They're going to be more worried about will the final demand sit that's watching the consumer behavior of the consumer side driven or uh, if they're in supply chains.

Is the demand going to stay there? So I think it's the markets will stay there for a company, see opportunities whether small, medium or large size. And I'll stay there as long as they have something to do with the money. Nobody borrows money just to have a sit around. It's like when people think about Sky bikes and what just happened. I mean, just say, you know, one could say, uh, we've got to have a view or they're going to do something, whether they just paid in the profit margins or whatever they're going to do with it, they're thinking about something.

One thing that you noted, the mortgages is something that Tommy Chau mentioned earlier, and he was saying that you've seen a lot of the traditional financial institutions gain market share back from alternative asset managers. And that's one of the reasons why the regulatory pullback has been so beneficial. Is that been your experience as well? Well, I think also,

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