Bank of America, (BofA), the
biggest retail lender in the US, is to introduce a variety of new
customer accounts in order to generate more revenue from its retail
business.
BofA said the new accounts
may include monthly fees or impose minimum balances as it moves
away from reliance on penalty fees.
Go deeper with GlobalData
BofA president and CEO Brian
Moynihan told analysts “We were too customer-friendly in terms of
the decision we made [on charging].”
He said that 10% of BofA
customers were paying 70% of the bank’s overdraft fees; that model
“was breaking and needed fixing.”
This led to complaints around
debit charges and complaints about deposits hitting an all-time
high.
Moynihan added: “We need to
do more work on pricing, more work on cost, more work on new
products.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“So, in the end, the returns
and deposits will get back to the pre-regulatory change
levels.
“If customers’ choices
change, we will visit decisions we made to make sure that
shareholders get the return we need in this business.”
The effect of new financial
regulations was highlighted by BofA’s third quarter results: a net
loss of $7.3bn following a $10.4bn goodwill impairment charge
against its card unit.
“We are adapting to the
regulatory environment, credit quality continues to improve, and we
are managing risk and building up our capital,” added
Moynihan.
