(Reuters) - Bank of America Corp (BAC.N) is largely finished with major divestitures and is now looking to grow by adding new loans, Chief Financial Officer Bruce Thompson said Monday.
The bank has had some success in increasing loans to mid-sized and large companies in the third quarter, Thompson said at an investor conference. “We are pressing hard there,” he said.
Meanwhile, the bank’s consumer lending business is at a point where it can start growing, when excluding $5 billion in discontinued loan products that are running off its books each quarter, Thompson said.
In the second quarter, Bank of America’s total commercial loans were up 4 percent from a year ago to $317 billion, while total consumer loans fell 10 percent to $575.3 billion. Many of its rivals, including Wells Fargo & Co (WFC.N) and U.S. Bancorp (USB.N), have been increasing their overall loan portfolios, while Bank of America’s loan book continues to decline.
In his presentation, Thompson highlighted how the bank has changed the way it does business as part of an effort to streamline the company and better serve customers.
For example, the bank has reshaped its credit card business by selling Canadian and European businesses and by focusing on selling cards through branches, Thompson said. The bank is also ending some “affinity” partnerships in which cards carried the logos of sports teams and nonprofit organizations and offered special rewards, a strategy inherited from its 2006 MBNA Corp acquisition.
As part of a cost-cutting strategy, Bank of America has also previously said it plans to close or sell 750 branches. The bank now has about 5,600 branches, down from a peak of 6,100, and executives continue to evaluate the branch network, Thompson said.
Using a baseball analogy, Thompson acknowledged the bank is in the “early innings” of realizing new revenue growth and reaping savings from its broad-ranging cost-cutting program.
Bank of America shares were down 1.8 percent at $8.64 on Monday afternoon.
Reporting by Rick Rothacker in Charlotte, N.C.; editing by Leslie Gevirtz and Matthew Lewis