CNBC TRANSCRIPT: BANK OF AMERICA CHAIRMAN & CEO BRIAN MOYNIHAN SPEAKS WITH SQUAWK BOX FROM DAVOS TODAY

WHEN: Today, Tuesday, January 23, 2018

WHERE: CNBC's "Squawk Box" – Live from the World Economic Forum in Davos, Switzerland

Following is the unofficial transcript of a CNBC interview with Bank of America Chairman & CEO Brian Moynihan on CNBC's "Squawk Box" (M-F 6AM-9AM) live from the World Economic Forum in Davos, Switzerland today, Tuesday, January 23rd. Following is a link to video from the interview on CNBC.com: https://www.cnbc.com/video/2018/01/23/bank-of-america-ceo-we-project-economy-to-grow-at-2-point-7-percent-this-year.html?play=1.

All references must be sourced to CNBC.

BECKY QUICK: RIGHT NOW WE WANT TO GET DOWN TO BUSINESS WITH OUR FIRST GUEST WHO HAS A BIG STAKE IN ALL THE MAJOR FINANCIAL ISSUES THAT WE'VE BEEN TALKING ABOUT THIS PAST YEAR. THOSE INCLUDE TAX REFORM, THE U.S. MARKET RALLY AND THE FUTURE OF BANKS IN THE DIGITAL AGE. JOINING US RIGHT NOW IS BANK OF AMERICA CHAIRMAN AND CEO, BRIAN MOYNIHAN. AND BY THE WAY, BANK OF AMERICA WAS THE BEST PERFORMING BANK STOCK IN 2017, IT WAS UP BY 32%. AND BRIAN, WE REALLY APPRECIATE YOU BEING HERE TODAY.

BRIAN MOYNIHAN: MY PLEASURE TO BE HERE ON A BEAUTIFUL DAY. AS JOE SAID, IT'S REALLY SPECTACULAR.

QUICK: WE GOT LUCKY TODAY. WE DO. BRIAN, YOU JUST CAME OUT WITH EARNINGS. THE NUMBERS WERE BETTER THAN EXPECTED, BUT ONE SLIGHTLY WEAK NUMBER WAS THE TRADING NUMBER. IT'S HIT A LOT OF BANKS BECAUSE OF THE LACK OF VOLATILITY. YOUR TRADING REVENUE DOWN 34% IN FIXED INCOME. FOR THE CURRENT QUARTER, WE HAVEN'T SEEN A WHOLE LOT MORE VOLATILITY, BUT WHAT'S HAPPENING WITH TRADING? CAN YOU GET US UP TO DATE ON THAT?

MOYNIHAN: WELL, THERE'S A SEASONALITY TO TRADING THAT GOES ON AND AS YOU OPEN A NEW YEAR, PEOPLE GET BACK TO WORK AND YOU SEE IT, AND SO IT'S BEEN A BIT STRONGER, BUT THAT HAPPENS EVERY YEAR. BUT IF YOU LOOK AT IT THE WAY WE RUN THE TRADING BUSINESS, TOM MONTAG AND TEAM, OVER THE LAST SIX YEARS OUR REVENUES RANGED IN THAT BUSINESS FROM 12.9 TO 13.6 BILLION IN REVENUE, SO IT'S MUCH MORE STABLE THAN PEOPLE THINK. AND IT COMES FROM OUR ABILITY TO CLIENTS AND OUR INVESTOR CLIENTS INTERACT. SO WE'RE NOT RUNNING IT TO SWING FROM THE FENCES. WE'RE RUNNING IT TO GET THOSE SINGLES AND DOUBLES AND THAT TEAM DOES A GREAT JOB.

QUICK: WE JUST TALKED ABOUT TREASURY RATES, HOW THEY'VE BEEN CREEPING UP A LITTLE BIT, THE TWO-YEAR, THE FIVE-YEAR, THE TEN-YEAR. THINGS ARE REALLY STARTING TO PICK UP A LITTLE BIT. AND I JUST WONDER WHAT THAT MEANS FOR BANK OF AMERICA, BECAUSE WE'VE BEEN WAITING FOR HIGHER RATES FOR A LONG TIME.

MOYNIHAN: WELL, IF THE RATE STRUCTURE MOVING UP REPRESENTS EVEN STRONGER GROWTH IN THE ECONOMY, AND NEXT YEAR THE U.S. ECONOMY PICKS UP A HALF PERCENT TO THREE QUARTERS OF A PERCENT, DEPENDING ON HOW SOME OF THE INITATIVES YOU TALKED ABOUT ROLL THROUGH – THAT'S A GREAT THING. IF THE RATES ARE RISING IN RESPONSE TO THAT. IF THE RATES RISING BECAUSE THERE'S INFLATION OR OTHER THINGS, THAT'S NOT SO GOOD, BUT WE ALL BENEFIT TECHNICALLY 3 BILLION DOLLARS IF THERE'S A BASIS POINT PARALLEL RISE IN THE CURVE FROM YEAR END. 60-70% OF IT IS A SHORT END. THAT'S ALWAYS BEEN TRUE. BUT THE REAL THING WE BENEFIT BY IS THE GENERAL ECONOMY, AND IT'S IN PRETTY GOOD SHAPE IN THE UNITED STATES, AND WE PROJECT IT TO GROW 2.7% VERSUS, SAY, AND THIS YEAR, LOW 2s.

QUICK: YOU KNOW, THE IMF JUST RAISED THEIR GLOBAL GROWTH FORECAST TO 3.9%, IT WAS AN INCREASE OF 0.2%, AND THAT WAS BASED ON THE U.S. TAX LAW CHANGES BECAUSE THEY THINK THAT'S GOING TO HELP THE GLOBAL ECONOMY OVERALL. WE KNOW KIND OF WHAT IT MEANS FOR BANK OF AMERICA, BUT WHAT DOES IT MEAN FOR THE COMPANIES YOU DO BUSINESS WITH? WHAT DO YOU THINK IT MEANS FOR THE BROADER ECONOMY?

MOYNIHAN: I THINK THE KEY FOR TAX REFORM IN THE U.S. FROM A CORPORATE PERSPECTIVE AND A GLOBAL PERSPECTIVE WAS A LOWER CORPORATE TAX RATE AND A TERRITORIAL SYSTEM. SO WHAT YOU REMOVE IS SO MANY INCENTIVES TO TRY TO MOVE MONEY TO FIGURE OUT WHERE THE NATURAL WATERMARK WOULD BE FOR ACTIVITIES. AND SO COMPANIES ARE GOING TO BENEFIT BY THAT. THEY'RE GONNA HAVE MORE MONEY TO INVEST. THAT'S ONE SIDE. AND THE SECOND THING IS THEY WILL BE LESS ABOUT TRYING TO FIGURE OUT THE KNEW WANTS IN NUANCES IN TAX. INTERESTINGLY ENOUGH AS YOU TALK TO CEOs OUTSIDE THE UNITED STATES, THE UNITED STATES SEEMINGLY BECOMES MORE ATTRACTIVE. WE HAVE A TALENT OF WORK FORCE THAT WILL BEAT UNEMPLOMENT SO LOW AS A QUESTION MARK IN TERMS OF HOW MANY WE HAVE, WE HAVE TREMENDOUS ENERGY RESOURCES, WE HAVE A RULE OF LAW AROUND WORKING AND EMPLOYMENT FLEXIBILITY AND WE A REGULATORY ENVIRONMENT THAT'S SWINGING BACK IN. SO WHAT I DON'T THINK PEOPLE SEE – WHAT I'VE BEEN PLEASED TO SEE SO FAR IS NOT ONLY U.S. REACTION, WHICH YOU MIGHT EXPECT A LOWER TAX RATE, BUT OUTSIDE THE U.S., THE U.S. BECOMES A MORE ATTRACTIVE PLACE TO MANUFACTURE AND DRIVE TO, AND I THINK THAT WILL HELP THE U.S. ECONOMY. WHEN THE U.S. ECONOMY GOES BECAUSE OF SIZE AND THE CONSUMER SIDE OF IT, THAT LIFTS A LOT OF BOATS. SO I THINK THAT WILL BE GOOD OVERALL FOR THE WORLD.

QUICK: WHAT DO YOU THINK ABOUT THE SMALL BUSINESSES? I KNOW IT'S VERY EARLY DAYS, BUT HAVE YOU SEEN INCREASED DEMAND FOR LOANS OR CAPITAL EXPENDITURE – TRYING TO FIND SOME WAY TO DO IT?

MOYNIHAN: WE'VE BEEN DOING SORT OF SUCCESSIVE RECORD QUARTERS OF ORIGINATION, SMALL MID SIZE BUSINESSES IT'S BEEN VERY STRONG. I THINK SMALL BUSINESSES TEND -- HAVE LOOKED THE LAST SEVERAL YEARS ON POLICY OF BEING A BIT WORKING AGAINST THEM. IF YOU GO BACK TO THE – WE DECIDE THAT POLICY INVOLVED BUT THE IMPLEMENTATION OF THE AFFORDABLE CARE ACT AND SOME OF THE OTHER THINGS CAUSES THEM TO SLOW DOWN AND RETHINK THE BUSINESS MODELS. WHAT HAS HAPPENED WITH THE REGULATORY MOVE PLUS THE TAX REFORM IS YOU HAVE TAKEN AWAY UNCERTAINTY, SO THEY'LL BE MORE AGGRESSIVE. IT'S ONLY A MONTH SO YOU HAVE TO BE CAREFUL OF OVERSTATING IT. BUT IF THEY TELL YOU THEY'LL DO IT, LETS SAY ITS 5%, 10% MORE AGGRESSIVE IN TERMS OF INVESTMENT, THAT'S A BIG DIFFERENCE WHEN YOU TAKE ACROSS OUR 200,000 -- OUR 200,000 SORT OF MID SIZE BUSINESS CUSTOMERS. JUST THINK OF EACH OF THEM BEING SLIGHTLY MORE AGGRESSIVE AND HOW THAT FLYWHEEL KEEPS TURNING AND GENERATING ACTIVITY.

ANDREW ROSS SORKIN: WHAT DO YOU MAKE OF THE COMPANIES THAT ANNOUNCED – INCLUDING, BY THE WAY, THE PARENT COMPANY OF THIS NETWORK, COMCAST – ANNOUNCING RIGHT AFTER THE TAX REFORM PLAN TO GIVE ONE-TIME BONUSES? WHAT DO YOU THINK THAT IS ABOUT?

MOYNIHAN: WE DID IT AS PART OF THE SHARED SUCCESS WITH OUR TEAMMATES. AND SO, WHEN WE THINK ABOUT DRIVING RESPONSIBLE GROWTH AT BANK OF AMERICA, WE THINK ABOUT BEING SUSTAINABLE, WHAT WOULD BE THE BEST PLACE FOR TEAMMATES TO WORK IN. SO WHEN THE COMPANY RECEIVES A BENEFIT LIKE THAT, WE THOUGHT IT WAS IMPORTANT TO SHOW THE TEAMMATES WE SHARED THE SUCCESS WITH. IT'S ONE PART OF WHAT WEVE DONE IN TERMS OF HEALTHCARE BENEFITS THAT WE'VE CHANGED AND LOWERED COSTS FOR LOWER PAID PEOPLE. WE'VE DONE A LOT OF WORK AROUND IT, SO IT'S ONE COMPONENT OF THAT. BUT I THINK IT WAS A GOOD SIGN THAT, HEY, WE RECEIVED A BENEFIT, YOU SHOULD SHARE IN IT. IT'S THAT SIMPLE. AND WE'LL CONTINUE TO USE THE TAX SAVINGS TO INVEST IN THE COMPANY AND CONTINUE TO DRIVE THINGS.

SORKIN: BUT WAS IT DRIVEN FROM AN ECONOMIC PERSPECTIVE?

MOYNIHAN: IT WAS DRIVEN BY – YOU RECEIVED A BENEFIT AND I THOUGHT IT WAS IMPORTANT TO SHARE THAT WITH THE TEAMMATES. AND BELIEVE ME, IF YOU GOT THE E-MAILS THAT I GOT FROM TEAMMATES WHO WERE EXCITED TO GET IT ON CHRISTMAS WEEK IN THEIR PAYROLL IN TIME TO SPEND IT, IT WAS A TREMENDOUS THING.

QUICK: LET'S TALK A LITTLE BIT MORE ABOUT THE CONSUMER. I KNOW THE CONSUMER WAS VERY STRONG. I HEARD WHAT YOU SAID ABOUT THE HOLIDAY SHOPPING SEASON, THE STRENGTH THAT WAS THERE. BUT I ALSO READ A REPORT YESTERDAY THAT SUGGESTED THAT CONSUMER BAD DEBT WAS UP BY 20% IN THE CREDIT CARDS FOR FOUR MAJOR BANKS, INCLUDING YOURS. WHAT DOES THAT MEAN? SHOULD WE BE WORRIED ABOUT IT?

MOYNIHAN: LET'S THINK ABOUT TWO DIFFERENT THINGS. THE SPENDING, IF YOU THINK FROM 15 TO 16 AND 16 TO 17, FOR THE YEAR, THE SPENDING ON DEBIT, CREDIT CARDS, CHECKS WRITTEN, CASH, EVERYTHING AT BANK OF AMERICA WAS UP 3% 15 TO 16, WAS UP 6%, 16 TO 17. AND THINK OF THAT DIFFERENCE AS BEING ACROSS $2.6 TRILLION OF SPENDING, AND THAT IS A LOT OF THINGS, SO CONSUMERS ARE OUT SPENDING. INTERESTINGLY ENOUGH, YOU HEAR ABOUT RETAIL SALES AND STUFF. THERE'S A LOT OF SPENDING ON EXPERIENCES, AND EATING, TRAVELING AND STUFF THAT'S PICKED UP. SO THE SPENDING IS VERY GOOD. ON THE CREDIT CARD PICK UP, WE'RE AT A LOW BASE. SO, WE ALWAYS HAVE A BIT OF A PICK UP IN THE FOURTH QUARTER, BUT WE WENT FROM, I DON'T KNOW, 2.6 TO 2.8 OR SOMETHING LIKE THAT. THESE ARE NUMBERS – WE USED TO UNDERWRITE THE 5.5% IN GOOD TIMES OF LOSSES. WE'RE NOW IN GOOD TIMES WE'RE EXPERIENCING HALF THAT. UNDER STRESS WE ONLY GET TO THAT LEVEL. SO THE CONSERVATIVES IN US AND OUR COLLEAGUES IN THE INDUSTRY ON UNDERWRITING WILL HOLD THIS IN CHECK. AND YOU KNOW, IT SHOULD. AND SO I THINK THE INCREASE OFF A DEBT COUNT BALANCE LEVEL AND IS EXPECTED. AND WE'LL SEE THAT TURN BACK DOWN AS WE GET THROUGH SEASONALITY. AND ON TOP OF THAT AS YOU CONTINUE TO GROW RECEIVABLES, YOU'LL SEE THAT IN GOOD SHAPE. AND SO, CONSUMER CREDIT IS IN GOOD SHAPE IN THE UNITED STATES.

JOE KERNEN: YOU HAVE CLOSED A LOT OF BRANCHES, BRIAN. MINE GOT CLOSED. THAT'S OKAY. IT'S ALRIGHT. BUT IN A LOT OF AREAS—

MOYNIHAN: A TECHNOLOGY GIANT LIKE YOU, PROBABLY--

KERNEN: YES. YES. EXACTLY. I NEVER USE CASH. I USE – WHAT DO I USE?

SORKIN: BITCOIN.

KERNEN: VENMO OR SOMETHING?

MOYNIHAN: YOU OUGHT TO BE USING ZELL.

KERNEN: MY VENMO, THROUGH MY PAYPAL OR SOMETHING. NO BUT, THAT'S A CHANGE IN STRATEGY, ISN'T IT? I MEAN, BANK OF AMERICA, THERE SHOULD BE ONE ON EVERY CORNER. IT SHOULD BE LIKE STARBUCKS. BANK OF STARBUCKS.

MOYNIHAN: THE THING IS, AS MUCH AS -- AT THE PEAK WE HAD 6,100 BRANCHES AND WE SOLD ABOUT 500 OR 700 TO SMALLER BANKS THAT COULD GET THE CONSOLIDATION BENEFITS, DO THINGS, AND WE CLOSED SOME. BUT IT WAS ALL BASED ON CUSTOMER BEHAVIOR AND CUSTOMER FLOWS. BUT THE REALITY IS IN THAT TIME, LAST YEAR WE REHABBED 300 OR 400 BRANCHES, WE BUILT ABOUT 50 OR 100 NEW. OVER THE NEXT FEW YEARS, IT'LL BE ABOUT 300 OR 400 NEW. WE'LL GO INTO CITIES LIKE MINNEAPOLIS AND DENVER THAT WE'VE NEVER BEEN IN. WE'VE GONE FROM 150th MARKET POSITION TO 8th IN THOSE CITIES ALREADY JUST STARTING OFF. AND SO WE'RE BRINGING OUR SERVICES AS AND CAPABILITIES. THERE'S SEVEN OR EIGHT LARGE CITIES IN THE TOP 50 U.S. THAT WE'RE NOT IN. WE'LL BE BUILDING BRANCHES. SO IT'S A VERY COMPLEX DISTRIBUTION STRATEGY THAT – WITH A CHANGE IN BEHAVIOR, IF I WERE A RETAILER YOU'D BE TELLING ME, "WHAT ARE YOU DOING IN TERMS OF ONLINE SALES?" WELL WE GOT ONLINE 10 YEARS AGO. AND SO WE'VE SEEN THE CHANGE IN CUSTOMER BEHAVIOR AND IT'S CRITICALLY IMPORTANT TO BE ABLE TO DO EVERYTHING, EVERY WAY FOR CUSTOMERS. WE HAVE A MILLION PEOPLE COME TO BRANCHES EVERY DAY. WE HAVE TO SERVE THAT WELL. WE HAVE 35 MILLION DIGITAL CUSTOMERS—

KERNEN: THAT'S UNBELIEVABLE. ALL SERVED BY ONE TELLER?

MOYNIHAN: 60,000 TEAMMATES.

KERNEN: STILL?

MOYNIHAN: IN THE RETAIL SYSTEM. YEAH.

KERNEN: OH OK. ONE TELLER LEFT, THOUGH. THANK YOU, BRIAN.

QUICK: IT'S GREAT HAVING YOU HERE. WE REALLY APPRECIATE YOUR TIME.

MOYNIHAN: THANK YOU. ENJOY YOUR DAVOS GUYS.

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