Bank of America: Stable when it matters
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Bank of America: Stable when it matters

Its cautious approach means the bank underperforms in some areas, but its management prefers it that way.

Paul Donofrio 960px.png
Paul Donofrio, chief financial officer, Bank of America

A pandemic year with households and corporations under unprecedented stress ought to be a vindication of Bank of America chief executive Brian Moynihan’s oft-repeated mantra of “responsible growth”.

The bank’s management says it doesn’t run the business to make the most money possible in the good times but rather to deliver through the bad times. Is it delivering?

Its pandemic efforts are undeniable. At the end of the third quarter, it had 343,000 loans outstanding in the US government’s Paycheck Protection Program – more than any other firm.

As the head of the biggest consumer bank in the country, Moynihan sees responsible growth through a lens of not just credit risk but also operational risk. He argues that the firm needs to be able to respond to client needs even when conditions turn sour, as they did in 2020.

“Responsible growth allowed us to have the operational discipline, as well as the credit,” he told the bank’s Future of Financials conference in November.

Paul

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