Bank of America has forgone nearly $6bn in annual revenue by phasing out risky consumer banking products and eliminating certain fees, a top executive told an investor conference in Boston.
However, the long-term impact on profits should be minimal, Thong Nguyen, head of Bank of America’s mass-market retail bank was quoted as saying by news agency Reuters.
Go deeper with GlobalData
Previously, the banking group earned about $3bn annually in punitive fees such as overdraft charges on debit-card purchases and about $3bn a year through the sale of identity theft, payment protection and other add-on products, Nguyen added.
The bank stopped the practice of charging consumers debit card overdraft fees and ended marketing add-on products in 2010 and 2012 respectively.
Nguyen said because the products and fees can lead to higher loan losses and legal expenses, the consumer bank’s income has become more stable since shedding them.
"We have refocused everything into our customer base because we have more customers than anyone out there,” Reuters further quoted Nguyen as saying.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataNguyen argued that it was more cost-effective to cater to existing clients.
Bank of America’s consumer and small business banking revenue was $14.8bn in the first half of this year, the same as the comparable periods of 2013 and 2012.
