WHEN: Tuesday, November 5th
WHERE: CNBC's "Closing Bell"
Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Bank of America President & CEO Brian Moynihan. Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000214848.
All references must be sourced to CNBC.
MOYNIHAN ON CAPITAL MARKETS BUSINESS
IT'S PRETTY SOLID. I WAS JUST TALKING TO HEAD OF THE EQUITIES BUSINESSES OFFICES DOWN HERE AND HE SAID YOU KNOW, THE CALENDAR IS PRETTY FULL. PEOPLE ARE PUSHING THINGS THROUGH. SO IT HAS BEEN PRETTY SOLID IN BOTH DEBT CAPITAL MARKETS AND EQUITY CAPITAL MARKETS. THE M&A BUSINESS IS SOLID. SO IT'S NOT ROBUST YET, BECAUSE THE ECONOMY IS STILL A LITTLE SLOW, BUT SOLID.
MOYNIHAN ON RULES
IF YOU THINK ABOUT THE REGULATIONS WE ARE NOW GETTING MOST OF THEM OUT. THERE WAS THE LCR, THE LIQUIDITY RATIO, THE BASEL RULES, THE LEVERAGE TESTS, THE STRESS TESTS, WE JUST GOT THE NEW STRESS TEST. SO EACH TIME YOU GET MORE THINGS. BUT THERE'S BEEN A CONSTANT FLOW. AND I CAN UNDERSTAND WHY PEOPLE OUTSIDE THE INDUSTRY WOULD LOOK AT IT AND SAY, THIS IS JUST ANOTHER THING COMING AT YOU. BUT IF YOU START WITH YOU HAVE THE RIGHT AMOUNT OF CAPITAL AND YOU BUILT THE RISK RIGHT, GENERALLY YOU'RE IN PRETTY GOOD SHAPE ON MOST OF THESE RULES.
MOYNIHAN ON STRESS TEST
IF YOU LOOK AT RESULTS FOR ALL OF US LAST YEAR, WE ALL CAME THROUGH IT WITH ENOUGH CAPITAL THAT IN A VERY DEEP RECESSION, POTENTIALLY WORSE THAN 2008 BY ITS MATHEMATICS, WE ALL COULD KEEP LENDING. SO THAT'S THE KEY THING, SO HOW WE KNOW 2008 WON'T REPEAT IS THAT YOU ACTUALLY HAVE ENOUGH CAPITAL TO KEEP LENDING AND NOT HAVE TO SHRINK YOUR COMPANY TO GET THE CAPITAL. THAT'S WHAT THE STRESS TEST IS MEANT TO SHOW. WE'LL SEE HOW WE GO THROUGH IT THIS YEAR. IT IS TOO EARLY TO TELL. WE JUST GOT THE STUFF LAST WEEK.
MOYNIHAN ON GIVING UP REVENUE, NOT PROFIT
THE RATE ENVIRONMENT REFLECTS A SLOW ECONOMY SO WE'RE ALWAYS GOING TO BE SLOWER. BUT LET ME GIVE YOU AN EXAMPLE. AT THE HIGH POINT WE PROBABLY HAD $250 BILLION IN CREDIT CARD RELATED BALANCES. WE NOW HAVE $100 BILLION. WHEN WE HAD $250 BILLION, EVERYONE SAID WHAT A GREAT BUSINESS YOU ARE MAKING THIS MUCH MONEY. WE PROCEEDED TO CHARGE OFF TENS OF BILLIONS OF DOLLARS OF CHARGE OFF RECEIPTS. NOW OUR CHARGE-OFF RATE IS THE LOWEST ITS BEEN IN MANY, MANY YEARS. GOING BACK INTO THE EARLY 2000S AND BEFORE. SO YOU HAVE A MUCH MORE SAFE BOOK, THAT WHATEVER COMES NEXT, WE'RE MUCH BETTER SITUATED. YOU GAVE UP SOME REVENUE, BUT HONESTLY YOU DIDN'T GIVE UP ANY PROFIT.
MOYNIHAN ON MODEL
THE KEY IS HOW BROAD A SCOPE DO YOU HAVE? AND DO YOU USE IT FOR MORE PROPRIETARY TRADING OR TO FACILITATE YOUR CLIENT ACTIVITY, WHETHER IT'S AN INVESTOR CLIENT – IN OUR CASE AND BY THE WAY, IN THE CASE OF ALL OUR PEERS, ALL THE CAPITAL HAS GONE TO REALLY PROMOTE ISSUERS, BIG ASSET MANAGERS, HEDGE FUNDS, PRIVATE EQUITY FUNDS TO DO THINGS AND CLIENTS TO DO THINGS. IT'S THE MODEL THE CLIENTS REQUIRE. IT'S THE MODEL EVERYWHERE ELSE IN THE WORLD HAS ALWAYS HAD ONLY IN THE UNITED STATES DO WE HAVE IT DIFFERENT.
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