Bank of America on Monday reported results for the first quarter ended March 31, 2022. In addition to the earnings report, Bank of America CEO Brian Moynihan and CFO Alastair Boswick provided insights into where the company is heading for the year.
The company increased the total annual budget for the technology program to $3.6 billion. In addition to the 512 patents Bank of America filed last year, the company is on track to build 100 new financial centers and renovate more than 800 in a year, Borthwick said. Bank of America is also continuing to work towards its goal of raising the minimum wage to $25 an hour by 2025.
Digital consumer engagement continues to rise, with Moynihan noting that Bank of America now sells more digitally than in-person. The bank also processes more cellular transactions than checks and will continue to invest in digital channels throughout the year.
“Our continued investment in digital capabilities drove our clients’ activity as our digital sales exceeded 50% in the quarter,” Borthwick said on the earnings call.
Additionally, Moynihan took time during the call to address the potential impact of macroeconomic conditions, including supply chain issues, the war in Ukraine, the ongoing global pandemic and the Federal Reserve raising interest rates to combat rising inflation.
Despite a number of factors already affecting the economy this year, the company remains optimistic and says it is well-positioned to meet these challenges. “We’re watching all this closely. So, is the economy going to slow? Maybe. But right now, the economy is bigger than it was before the pandemic,” he said on the conference call.
He went on to say that consumer spending looks strong, unemployment is down and corporate earnings are up. Amid further Fed rate hikes, Maynihan says company is conducting quarterly stress tests to prepare for it
“What if we’re wrong and things get harder? We already know what that looks like. When we built up a lot of reserves in 2020, we also built up 90 basis points of capital during the shutdown. We’re negative, profits are down. So we’ve shown our resilience,” Moynihan said.
The company reported pretax income of $7.9 billion on sales of $23.2 billion and earnings per share of $0.80. Compared to the first quarter of 2021, both revenue and earnings were up in the quarter. The company’s spending has also increased.
“Going forward, we will continue to invest significantly in technology, people and marketing across all of our businesses, and we will continue to add new financial centres in an expanding and growing market,” Borthwick said.
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