Bank of America Corp.'s chief executive, Brian Moynihan, urged investors Tuesday to look beyond the bank's poor immediate condition to what he called the "massive strategic repositioning of our franchise."
Its
Meanwhile, net interest income dropped 15% from a year earlier, to $10.7 billion, and the downsizing bank
Bank of America officials emphasized their efforts to slash expenses in a conference call with analysts. Moynihan laid out further details of "Project New BAC," the bank's cost-cutting plan, and suggested that the its history of acquisitions made large cuts appropriate.
"On the retail business, it's more about optimizing cost structure," he said.
Noninterest expense decreased $5.3 billion from the prior quarter, to $17.6 billion.
Moynihan also said the bank's controversial step to charge a $5 monthly fee for debit card users will not drive off customers who cannot maintain the higher balances or other requirements necessary to avoid the fee.
"The issue is when people split their relationship and use our convenience and our access…that is tough for us to afford to provide," Moynihan added. "The fees are to get people to bring more of the relationship" to B of A.
The third-quarter earnings show the bank is still feeling the drag from its troubled real estate business. Its consumer real estate services business posted a loss of $1.1 billion, and the bank continues to hold on to $17.6 billion in troubled residential mortgages.
Bank of America's efforts to shrink itself were evident in its mortgage division, where revenue from new originations fell to $33 billion from more than $40 billion the prior quarter, despite a boom in refinancings reported by the bank's competitors.
