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2025-11-06 02:30:10
[Key Takeaways from Bank of America Investor Day] Bank of America set new targets for its business, planning to increase its return on tangible common equity (RoTE) from the current approximately 15% to 16%-18% within three to five years, with an efficiency target of approximately 40%. In investment banking, it plans to increase investment banking revenue at a mid-single-digit compound annual growth rate, achieving this through participation in larger transactions and a more significant role in mergers and acquisitions (M&A). Transaction revenue is targeted to increase to $27 billion over the next three to five years, achieved by deepening its foothold in international markets. The bank is heavily investing in artificial intelligence (AI), currently allowing investment bankers to use such tools to create pitchbooks for clients, anticipating future cost savings. The CEO believes AI will drive a "new wave of efficiency improvements." The bank remains committed to its long-term strategy of expanding its physical branch network in the US, aiming to increase average loan balance from $196 billion to $225 billion in the medium term, although fintech may weaken large banks' dominance in checking accounts. The bank is also venturing into continuation funds. The fund advisory business hopes that performance stars (Rainmakers) will negotiate higher fees to provide Merrill Lynch clients with $560 billion in alternative assets (Alts), preparing for growth as the housing mortgage market recovers and seeking to accumulate $1 trillion in assets in the consumer investment sector, with organic growth as the foundation of past performance.
