Bank of America Corporation (NYSE:BAC) Morgan Stanley US Financials, Payments & CRE Conference Call June 11, 2024 9:30 AM ET
Company Participants
Dean Athanasia – President, Regional Banking
Conference Call Participants
Betsy Graseck – Morgan Stanley
Betsy Graseck
I do have to read a disclaimer notice. So, I’m going to start with that. For important disclosures, please see Morgan Stanley Research Disclosures website at www.morganstanley.com/researchdisclosures. The taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative.
With that out of the way, we are so delighted this morning to have with us Dean Athanasia, President of Regional Banking at Bank of America.
Dean Athanasia
Well, thanks for having me. I appreciate it. Great being here.
Betsy Graseck
It’s our pleasure. So, good to see you.
Dean Athanasia
Nice to see you.
Question-and-Answer Session
Q – Betsy Graseck
So, just as an overview, you oversee four of BofA’s eight business lines, including retail banking, preferred and small business banking, business banking, global commercial banking. And you also oversee data, digital and global marketing, global payment solutions, retirement and personal wealth solutions, and consumer, small business, wealth management banking and lending products. This is quite a mouthful.
Dean Athanasia
Yes.
Betsy Graseck
And I suppose the kick-off question here is what benefits do you see combining these business lines under one leader?
Dean Athanasia
Yes. It’s actually — if you look at our strategy, and I’ll stick to the US, we can talk a little bit about international down the line. But those are all the businesses that we cover in our 97 markets in this country. And we want to be local. We want to make sure that not only are those businesses from consumer to small business to business banking. So, we cover businesses or I cover businesses from startups all the way up to $2 billion, and those are predominantly in the US markets here. So, we make sure that I oversee all that.
So, we dominate and look at market by market in our 97 markets. We make sure that those individual lines of business are winning in those markets and they’re taking share, and also working together to take additional share and combine and help each other out. The referrals go — we always mention the referrals, but in those businesses, over 8.4 million client referrals last year, we’re up around 3 million client referrals this year.
So again, it is an intense focus in the markets. I’m overseeing how they are doing in those markets to make sure we have all the resources they need and making sure that they’re taking share and growing and helping each other do so. So, it’s — what makes us unique is that coordination point, we can compete against the regional banks because we’re local, and we have all those resources and we bring it to bear in those markets. And then, we compete against our peers because of that coordination within those markets. And with wealth management on top of it, it gives us a leg up.
Betsy Graseck
And when you say $2 billion, corporates that — from small business up to $2 billion in revs annually?
Dean Athanasia
$2 billion in revs annually, yes.
Betsy Graseck
Okay. I just want to clarify that.
Dean Athanasia
Sure.
Betsy Graseck
And then, could you talk a little bit about how the businesses integrate with Bank of America’s other four lines of business to deliver full-spectrum banking for individuals, companies and institutions?
Dean Athanasia
Yes. There’s a couple of different ways. I know you talked to Bernie Mensah before, but we do that same thing on an international level across 35 — 37 different countries across the world and coordinate that way. But in between, we also have some connect points. So, in the US, investment banking for our commercial clients is critically important. So, we put 200 bankers out in the markets, partnering with our relationship managers on the global commercial side and winning business in that sense. So, there’s integration points along the way of how we connect with each other.
Of course, on the wealth management side, Private Bank and Merrill Lynch, although I don’t manage them directly, are closely coordinated and they get tons of referrals from our consumer franchise, from our small business franchise for business owners. So, there’s all those connect points that happen within our markets. And again, the goal is, yes, you got to win individually for a line of business, but you’ve also got to help the rest of the businesses in our companies and partner and help them win as well.
Betsy Graseck
Right. So, a very big piece of Bank of America and engine for growth, which we’ll get into in a minute. Before we get into that, I did want to ask you about how you’re assessing the current health of the consumer and small business. Just what are you seeing in the consumer portfolio and spending and all those kinds of things?
Dean Athanasia
Yes.
Betsy Graseck
Yes, let’s start with consumers first.
Dean Athanasia
Yes. I mean consumer is still very healthy. As I see it, they still have balances left over. I’m not going to tell you anything you haven’t heard. In their checking accounts, they’ve got 23% more funds in their checking account as a unit than they had pre-pandemic and then more savings on top of that. So, they’re spending pretty consistently. It’s not as high of a rate. Last year, they spent at about a 5% clip. This year, they’re spending just under that, about 3.5%. So, they’re still spending. That might be slowing down a little bit, but they are spending.
Credit cards returning to normal. I know you’ll probably ask me that. So, people aren’t overspending on their credit cards. They’re sort of returning to normal. Revolvers are going up. Of course, loss rates have sort of normalized a little bit, slightly equivalent to pre-pandemic. Clients are spending more, though, on their debit cards than they are on their credit cards. So, we still see some rational behavior going on.
And then, I think, overall, you can see consumers without data, I saw Liz on this morning, CNBC, switching around between where they’re spending. So, they’re spending, finding sort of more discount stores, more switching the spending from the higher end down to the lower end to preserve that funding going forward. So, you’re seeing a slow return back to normal, but they’re in — from a health perspective, in great condition still.
Betsy Graseck
Okay. Great. So that 3.5% is spending growth year-on-year?
Dean Athanasia
Yes.
Betsy Graseck
Yes. Okay. I just want to clarify that. And then, what about small business? What are you hearing from small business clients, demand for borrowing, for example, and also the commercial clients? Thanks.
Dean Athanasia
Yes. I cover businesses all the way up. I would say you see more demand on the lower end. Now, our small business number, I think, 7% to 9% growth on loans year-over-year, but some of that is sort of just pure client acquisition. So, there’s a higher demand there. If you get sort of towards the middle segment, so $10 million to $50 million revenue size clients, they’re sort of returning and you’re seeing a little bit more demand there be in the 4% to 5% year-over-year range on loans and then all the way up to our commercial, which I think has diminished a little bit. They’re still growing, but diminished a little bit by corporate paydown. So, when you add all that up, you see a stronger demand on the lower end. And then, as you get some of the larger clients on commercial, they have more access to the capital markets. They’re a little bit more sensitive on rates. So, the borrowing is still good and it’ll still be up year-over-year, but you’ll see slightly less muted versus our lower end.
Betsy Graseck
And what would you say that breakpoint is between that 4% to 5% middle of the range versus I’m big enough to go to the capital markets?
Dean Athanasia
I would say that’s anywhere, you start to get — like $50 million to $75 million range, it gets a little bit more sophisticated, and they have better access and have more options and choices.
Betsy Graseck
Well, this is a great discussion, because I’ve been confused. Why is C&I lending so low when the economy is so strong?
Dean Athanasia
Yes. Like they have — they’re managing their balance sheet a little bit more tidy. They have a lot of cash and they can access capital markets for funding needs.
Betsy Graseck
Right. Got it. Okay. That makes a lot of sense. So, given the wide range of businesses you are running, where do you see the biggest opportunities for accelerating revenue growth and generating operating leverage?
Dean Athanasia
Yes. I’d see — if I go through all the different lines of business, I’d see — it’s a different story in consumers. It’s pure. We entered eight new markets in the last couple of years. We’ve entered another nine new markets — and we’ll get nine new markets by ’26. So, it’s a market-entry strategy. And then, it’s also within those markets, even the existing ones we have, there’s still room for growth. In the top 30 markets in the country, there are six or seven that don’t have a #1 or #2 position and my team knows that. So, you’ve got to go after that, you’ve got to penetrate, but every market needs to take market share along the line. So, that is a client acquisition, client growth and deepening sort of opportunity in our consumer franchise. That is just a consistent way we sort of grind it out.
On the wealth management side, it’s more of a sort of a penetration overall. We have the retirement business. We’re capturing rollovers. We’re growing our clients that way and deeper penetration on the banking side, I think, across the board. I think we have 20 percentage points we could add on in terms of a deepening as we continue to build stronger relationships.
And then, on the lower end of our small business and business banking side, there is probably five markets out of the top 30 that we’re not one or two. And so, we’re deep into those markets going after them. We can capture share and grow there.
And then, on the commercial side, there’s opportunities with investment banking. We’ve been going at it more locally. We’re in 26 cities on the ground for investment banking, partnering with our global commercial bank and partnering with Matthew Koder and Wendy to create more of a relationship play there. So, we’ve added 200 bankers. We have 200 bankers out in our markets, working locally with our teams supporting our clients here.
So, those are the different opportunities I see that are first and foremost for us right now.
Betsy Graseck
Can I just ask you to go back to the comment that you made about 20 percentage points? Could you just unpack that a little bit?
Dean Athanasia
20 percentage points, I’d say like on, we see a wide range. When I look at clients on the wealth management spectrum on the lower end, we’ve got about — we capture about 70% of their banking, overall 71%. And then, as we get up towards the higher end, that number trends down to 50%. So, I think there’s a delta there that we can capture and an opportunity. We can do loans, deposits, checking, savings and any type of banking and capture more of that — of the higher percentage from our Merrill clients.
Betsy Graseck
Got it. Okay. That’s helpful.
Unidentified Analyst
[indiscernible]
Dean Athanasia
Yes. We have a program called Employee Banking and Investments, so it’s a good point from off stage, but a connect point between our commercial clients. We’ve got 10,000 commercial clients. We actually combine. Our consumer team works with our commercial team to go into those clients and offer a program that gives all their employees banking services. So, we’ve got over 400 clients signed up, and that equates to about 6 million employees that are now signed up for our program, our Preferred Rewards program that they can access or they get special access to all of our — and special pricing on all of our products and services, and it’s a great benefit to them. So, it’s a complete tie-in where the commercial bank offers it, and our consumer team goes in and is able to acquire clients that way, both in the consumer side and the wealth management side. So, it’s a huge tie-in.
Betsy Graseck
EBI.
Dean Athanasia
EBI, Employee Banking and Investments.
Betsy Graseck
Okay. Great. Thank you. Excellent. And operating leverage, is there any one of those that stands out? Or would you argue that, that’s all similar across the board?
Dean Athanasia
Yes. I think it’s similar across the board, although there’s a huge digital aspect to that. Any time we open a financial center and we go to a new market, that increases our digital sales by over 50%. So, digital is a huge component to all of our businesses. So that continues to drive down, whether it’s finding more efficient ways for clients to conduct business with us or it’s a cost avoidance point where they’re doing new business through digital, where before they were doing it sort of manually.
So, anything like Zelle, up to 22 million users. Those payments — now Zelle is — the combined transactions through Zelle is more than cash and ATMs and other forms of payments. So that’s just a huge efficiency play, and that gets better and better over time. We’ve got Erica. We’ve got 19 million users on Erica on the consumer side, which is our AI equivalent, but we brought that over to the commercial side and the business banking side. We’ve got 7,000 users there. So that’s helping us drive down all the manual interactions, and that’s a natural cost, either take out or cost avoidance overall.
Betsy Graseck
And do you feel Erica now is fully utilized in your purview? Or would you think there’s more to do there?
Dean Athanasia
No. We operate on continuous growth there. So, we find new things for Erica to do. We find better ways if — we’re down to, if you call in and ask a question and Erica doesn’t answer it the first time and get it right, then we’re looking at sort of different ways, Betsy might have asked a question differently than she ever has before or we’ve never seen before. So, it keeps learning and doing better.
And our technology — I should add just our technology investments, I mean, another — we spent $12 billion just on total in the system and just under $4 billion on new initiatives. So, all of that money is going to either we’re going to grow, and it’s all targeted, every dollar you’ve got to grow. You’ve got to take out costs, so you’ve got to avoid risk and take down risk. So, it is a huge innovation. Every single month, something new comes out on Erica or on our digital apps.
Betsy Graseck
Okay. Great. I want to flip to international for a little bit here.
Dean Athanasia
Sure.
Betsy Graseck
Brian recently talked about international growth, and we know you’ve been involved in non-US markets for many decades now, but hasn’t gotten a lot of attention. So, I did want to understand how international ties in with your purview. Maybe you could speak to the commercial banking and payments clients in particular, and how you’re involved in not only your clients reaching out globally, but are you looking to expand globally?
Dean Athanasia
Yes. So, we’ve got a great franchise that’s been growing at 7% cumulative average growth rate for us since 2020. So, the international franchise is good. It’s growing. We’re investing in it. As it relates to my business, the way I contribute to that, I have those 10,000 commercial clients in the US, they all have overseas subsidiaries. So, first comes first. I think I can double that subsidiary business that we do overseas. I was in Mexico recently. We’ve got clients, a number of clients there. I think we can double or triple the amount of subs that we handle, and that would contribute to the international business. So, there is a global commercial tie-in. We do — we have subs in 15 different countries around the world. So — and that’s a huge growth opportunity for us.
On the payments end, global payments and solutions, global payments, in general, just a huge franchise for us. So, we are, in all of those markets in the 35 countries, that’s either the #1 or #2 revenue stream, and there’s room for growth there as we expand. We do — we have over 150 currencies. We’re a part of over 100 exchanges. We are deep in those countries, helping them outgrow and transact with all-new capabilities across the board. So, that is a huge component. It helps Bernie, it helps Jimmy and it helps Matthew Koder as well. And I think we do business with 70% of the Global Fortune 500. So, especially for those clients who do business around the world, so it’s a great business for us.
Betsy Graseck
And do you think Erica would ever go global?
Dean Athanasia
Yes. Erica will eventually — we started off on the US side. And again, we’re just getting into companies now and finding different applications, both internally, right, because our relationship managers access Erica to find information and give them information and then also for our clients. So, 7,000 companies are using it right now. We expect that to grow and build, and yes, we’ll have an international version of that at some point.
Betsy Graseck
Right. Okay. I just realized that it took a while of investment, right, dollars to get Erica up and running in English. So, do we have that same timeframe for moving into other language?
Dean Athanasia
Yes, I don’t have a timeframe on it, but it’s definitely on the drawing board. And we will definitely — as we learn with our corporate clients here, then we will bring it internationally, yes.
Betsy Graseck
Excellent. Okay. Great. Let’s go back to the US and talk a bit about what’s going on with deposits. I hear from investors every day asking me, how is deposits going? And obviously, your piece of Bank of America is a critical part of deposits gathering for Bank of America with, I think, it’s just under $1.3 trillion of total deposits in your purview. So, more than half of Bank of America’s deposit base. I wanted to understand how you’re seeing deposits trending and how you’re thinking about deposit pricing here.
Dean Athanasia
Yes. On deposits, in terms of, I think — well, you can look at different elements. I’d say on the consumer side, we’ll probably stabilizing around $940 billion, $950 billion in deposits, and you still see that sort of, as I said before, a little bit of spend and paydown and I think just returning to some normalcy here and creeping towards finding the bottom of that. But I think they’ve stabilized around there. I think pricing has stabilized as well. You’ll start to see rate paid will not accelerate just as much and sort of slowly diminishing quarter-over-quarter. So that’s stabilizing a little bit, too.
On the wealth side, they are more sensitive to rates, obviously, and sort of you see larger tax payments come out in April was a big tax payment day. And so, you see like some activity there and then clients seeking out rates more. They can go off balance sheet, on balance sheet — still stays with us, but they can go off balance sheet and on balance sheet with us. So, you still see a lot of gyrations there right now. But generally on the consumer side, stabilize around that point.
Betsy Graseck
Okay. And that rate-seeking behavior from noninterest-bearing into interest-bearing is still continuing or…
Dean Athanasia
It continues a little bit more on the upper end in the more affluent, high-net-worth side than it does within the sort of lower-end consumer world.
Betsy Graseck
Okay. And we’ve heard the numbers coming from Brian and team over the earnings calls around significant new checking accounts, I think, 21 quarters of consecutive checking account growth. What do you think is driving that? What do you think is making BofA a better place, a better choice for consumers? What’s your competitive advantage from your perspective?
Dean Athanasia
Yes. It’s sort of some of the things I get, first off, we go — we always say high tech, high touch. So, it’s like, let’s be out in the local markets, let’s get out, let’s expand into the markets that we need to be, let’s leverage all the things, CBI and everything we’re talking about that would add to client acquisition. So, there’s an investment there certainly on the ground, and we’ve got to be local. We’ve got to be present to get our brand out there.
Second is coupling that with digital. And it’s not just we do digital, but we invest heavily in digital. Like I said, once we get a presence in a market, the digital sales doubles. But everything on a digital, we are — it’s innovative and the strategic advantage is it’s completely integrated. So, when you pull up as a client, you can see your net worth, you can see your entire balance sheet, you can do the same thing on the corporate side and the business side. So, everything and all the businesses I have, it’s another benefit of it all being under, it has to be fully integrated. And that’s a huge advantage from a capability standpoint by coming with us. So, when clients come with us, not only do they come and they get attracted, but they stay with us across the board.
And then, the third reason would be just pure customer service. Every single area in our organization is measured on customer service and satisfaction. We’re at an all-time high. So, if we lose a client, it is one out of our 66 million-or-so consumer clients. It is a question of why did that client leave? What happened there? What led to it? And so that is, first and foremost, on a service, service, service, whether it’s in the financial centers and the call centers, in digital across the board. So, that’s allowing us to sort of attract, grow, but also retain. When Aron gives you a checking number, he’s giving you a net checking number, a net checking growth. So, it is the culmination of all that, that he’s talking about.
Betsy Graseck
Okay. And you didn’t mention pricing.
Dean Athanasia
Yes. Well, first off, I think in terms of that, again, going back, the regionals can’t compete with us on just the pure investment and what we’re doing and the capabilities. And I think versus our peers, we have that organization and we have that integration, it’s a huge part of it. Pricing, it has always been this way since I’ve been here. We are not — we’re sort of competitive on rate, but then we let all those other pieces of value drive the value proposition. So, yes, we’ll be competitive on rate and it’s different by different markets. And we’ll never be the top rate. We never chase deposits in that sense because we just think that’s a losing game. They can go in and out to whoever has the top rate, and we then add all those other value points.
So, the core of Bank of America is in the operating account, both on the consumer side and then on the business side. We want to own your core operating account. We want to drive that. And that comes with, you’ve got to have the right capabilities and you’ve got to have the right service and you’ve got to have a complete integration across all your products.
Betsy Graseck
Okay. Great. So, I think you’ve run through everything on deposits that we could talk about there. Maybe we could switch to lending. I know we talked a little bit about card balances and revolvers picking up a little bit. Can we talk about some of the other consumer asset classes that you’ve got? Home equity lines of credit, seems like it’s an efficient cost of funds for borrowers. So, how do you think about that asset?
Dean Athanasia
Yes. I think — well, I’ll start with — like in the mortgage space, obviously, there’s not a lot of movement yet in housing. So that is a large asset of ours. And I think for everyone in the industry, it’s sort of mutated right now because there’s not a lot of activity out there.
On the home equity front, it’s okay. I don’t think — you will not see — home equities are usually useful when people do home improvement, renovations and things like that because it’s cheaper to do it through a home equity than it is with a credit card. And that activity has not yet really picked up as high as it was. So, I think it’s still an option for clients. We still talk about it that way when we offer it out in the market. But I do not see — I see a low level and okay demand. It will grow a little bit, but I don’t see an outsized demand there at all.
Betsy Graseck
Okay. Got it. And what about auto? New originations have been in the range of $6 billion to $7 billion per quarter. Is there an opportunity to lean in even more there? Just wondering since returns seem pretty robust.
Dean Athanasia
Yes. It’s a pretty consistent asset for us, and we’ll get low-single digit growth on auto loans and origination. So, we’ll grow there. We won’t do anything outsized. We won’t take longer tenures, we won’t dip into subprime. So, it’s an asset by the — with our responsible growth strategy, it’s a pretty consistent asset for us and we’ll take the opportunity when it comes up and continue to grow there.
Betsy Graseck
Okay. Great. And then lastly, on small business, as you indicated earlier, small business loans are growing nicely. I think most recently, 9%-or-so year-on-year, and that’s in an industry where, I should say, H8 data for the commercial being down. The question here, just digging in a little bit more, how are you able to generate that kind of result, especially with this lean in from private credit that’s going on?
Dean Athanasia
Yes. We have — so on the lower end, our clients rely on us for borrowing across the spectrum, whether it’s card borrowing, sort of term loans, revolver loans, we have Practice Solutions, which is all-dental doctor practices across. We have specialized loans for those groups. I mean we have over 3 million small businesses, and we’re growing like exponentially. In all those markets I talked about, small business follows the consumer franchise and all those new markets. So there’s new clients coming in every day. It’s a complete growth engine for us, both on the deposit side and on the loan side.
So, there’s new clients coming in. We have the right products. We have thousands of small business bankers out in the field working with clients. And again, we have a huge cadre and portfolio of clients with which we can lend to. So, we do it responsibly. We make sure they can handle it, and we have any number of products for them, whether it’s a small loan of $50,000, $100,000 loan or a $500,000 to $1 million loan, we can supply any service. So, there is no — there’s a huge opportunity there, and we can selectively lend and make sure we do it the right way and we continue to grow loans there.
Betsy Graseck
If a small business or medium-sized business was interested in accessing credit, maybe more levered or in a way that might be different from — or term loan structure or something like this that we hear private credit is more leaning in on, is that something you would consider or partner with…
Dean Athanasia
Maybe I have to — that’s more sort of an upper-end question with Matthew. It wouldn’t be for my client base at the moment right now. And again, we have all the products and services they can offer and sort of we can help them manage their rate, we can help them manage their cash flow. So, it’s not a client demand or it’s not something that — so therefore, for us, it’s not a product we need to supply to them.
Betsy Graseck
Got it. Importantly, you’ve mentioned branch growth as a key driver of account acquisition. So, could we talk a little bit about the brand strategy from here? And I know in the past decade, you’ve added quite a few branches, and I think there’s several more new markets coming by 2026. Could we talk a little bit about the new markets you’re entering? And at that stage, how far — how fully baked do you feel your branch network is?
Dean Athanasia
Yes. Well, I’d say, I’ll go into — so yes, we constantly — we have 3,800 branches, and we used to have 6,000 at one point. So, we’ve got some great efficiency. And the way to — and we’ve doubled deposits in that timeframe, too. So, don’t — we never sacrifice growth. But the way to look at the financial center and how we look at it, we make sure we’re strategically positioned in the market. So, even — if we’ve had branches for 10 years, we’re constantly renovating those branches, enhancing them, they get refreshed so they always look in great condition for — and we move them around to make sure they’re in the right location. So, in that entire network, the way to look at it is we’re constantly reevaluating the network, making sure we’re covering markets that we’re not in. And then, also with this opportunity in existing markets, either adding branches or moving them around.
So, it’s a constant — we’ve been doing that for 10 years now. And then, all these new markets are helping us grow. And again, it enhances our digital, enhances our sales overall, enhances our market share. But the goal is not to put out an individual financial. The goal is to go into that market and take share. So, we have shares ranging from 27% all the way up to 62% of household shares in a market. And again, I want to be #1 or #2 in every single market. So, the goal is, we will put financial centers where it will add value. We’ll do it efficiently, and then we’ll capture share and take that level of share because we know we can do it.
And as far as markets go, my memory is not that great. So the eight we’ve added: Pittsburgh, Cinci, Columbus, Lexington, Cleveland, Colorado Springs, Fort Collins, Utah in Salt Lake City. And then, the nine markets we’re going to: Omaha, Boise, Louisville, Madison, Birmingham, Milwaukee, New Orleans, Dayton and Huntsville. There you go. I wish I could do that off the top of my head, but I can’t any longer. So, there’s the eight we’ve already done and the nine we’re going forward to.
Betsy Graseck
And then, start to optimization [Technical Difficulty] growth profitability, that kind of thing, how many years is that from when you open a branch to when you say, okay, it’s fully baked and contributing?
Dean Athanasia
Yes. It will — we expect them — seriously when I say this — when I put a financial center, when Aron puts a financial center, day one, we expect them to get traffic, take share. And remember, we have all these other business lines already in the market. We have the Private Bank, we have Merrill Lynch, we have my business banking, commercial banking. So, they’re all bringing us clients on day one. So, we expect them to contribute to market share day one. If you’re talking about just a pure profitability, it just depends on density of that particular market. It could be three to four years, it could be longer than that. But that’s generally — you’re generally working towards that.
But we wouldn’t put that financial center in just because we don’t. There is a serious opportunity, there’s serious partnerships with other businesses, which bring us clients, as I talked about in the beginning. And so, the minute we walk in, we know who they are, we know where they are. We have digital clients [indiscernible] say, “oh, Bank of America is here. I’m going to go into that financial center,” and it just sort of adds to it overall. But it is the market we’re trying to cover, not any individual branch.
Betsy Graseck
Okay. Great. Any question I didn’t ask you on branches that you wanted to make sure you got across?
Dean Athanasia
I mean I think the only other benefit of that, Betsy, is that they are for — there are many people in different markets that we all maybe work in one city and travel to the next for. But there’s many people that live and work in the city and for that, it is a huge advantage to advertise seeing the Bank of America brand every day, knowing that brand and how it resonates across the US, that’s a huge, huge win for us. It automatically attracts clients because they know what they’re getting from — and they know they’re going to get both digital and personal service. So, that’s the only other added value, I’d say.
Betsy Graseck
There’s a marketing element there.
Dean Athanasia
There is a huge marking element I think people undervalue. We don’t quantify, but being there and resonating in the market, it brings so many other benefits.
Betsy Graseck
So, we should expect the branch — net branch count going up?
Dean Athanasia
We always evaluate that, but I would say, I think it’s sort of in that stable range now. If you ask me over the next five to 10 years, I don’t think — I think, in general, in the industry, the branch counts will be down because I think people will be — this younger generation coming up, they need a base and a core structure and they need to sort of see the entity, and they need to know it’s there, but they will transact digitally. So, I think you could look at 10% to 15% less branches over time, I think. And — but I think that’s an industry thing versus a Bank of America thing.
Betsy Graseck
Okay. Great. So then just thinking about the fees a little bit, we talked about the workplace benefits program that you’ve got. And so that’s going to be contributing to fee line, right?
Dean Athanasia
Sure, yes.
Dean Athanasia
What about investment banking? Can you talk about the investments you’re making there?
Dean Athanasia
Yes. For us, I think partnering with Matthew Koder and I mentioned a few of it, we’ve got — we’re #1 in investment banking with our own commercial client base and the clients I see. Now it’s time to take that to get bigger to penetrate. We’re probably #3 in the US market, but leveraging that sort of middle-market commercial franchise to help Matthew grow. He’s growing on the upper end, of course. But we can bring all of our clients, and that’s the reason we put all those investment bankers in the field, partnering closely in those 26 cities, top markets with our commercial bankers to make sure we capture every opportunity. If we lose business amongst our own clients, that’s — we do a complete evaluation of why we lost that business. We make sure our investment bankers are introduced with the commercial bankers every single time so they become familiar as a team out in the market, and we want to bring all those capabilities in.
So, we fully expect to be — to strive to be #1 in that market. We’re growing. We’re capturing share. I think we’re up over 100 basis points year-over-year is what Matthew would tell you, but we’ve got great opportunity and upside there.
Betsy Graseck
And can we talk a little bit about the global payments solutions, because that’s something that Bernard Mensah recently was talking about with regard to the global international strategy and push there. So, how is that translating into what you’re doing with your clients from a treasury services perspective? Is there a need, a demand, a desire to have real-time payments settling globally at T?
Dean Athanasia
Yes. I think we’re doing that today certainly in the US. We’re seeing more and more demand from companies around the world. There are over 70 sorts of real-time payment networks in countries where we’re part of the majority of all of those. So, we will go and we will help our — they still do a lot of batch processing and a lot of other day one, day two type of transactions. But real-time payments both in the US and abroad is a growing trend. We’re on the forefront of that. We’ll keep investing along those lines, keep connecting and making sure our multinational clients can and be able to conduct business in all those different countries we’re in, and we’ll help them get there.
Betsy Graseck
Right. Just remind, you are overseeing data and digital as well, right?
Dean Athanasia
Yes.
Betsy Graseck
So, important and just wondering, the payments infrastructure that you’ve got to do that globally, is that all BofA infrastructure? Or are you using third parties to help you on that?
Dean Athanasia
It’s predominantly BA, Bank of America infrastructure. We will, though, use third parties when it actually helps our client. We can do — if we can do something faster and partner or use some service, we’ll use that, but it will be more client-driven. It’s not the first thing we do. And of course, they have to be — use our security protocols, our network. There is — so to bring a third party on, there is an extra level of scrutiny given the regulatory environment. So, if we do use a third party, it’s in a small sense, but it’s something that will help us bring additional capability or transaction capability with the client.
Betsy Graseck
Excellent.
Dean Athanasia
All right.
Betsy Graseck
Well, thank you very much. I appreciate your time this morning.
Dean Athanasia
Thank you. I appreciate being here. Thank you.
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