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“As we look left and right, we’re right with the other climbers, in terms of competitiveness and how we approach the market,” said Brian Moynihan, CEO of Bank of America (NYSE:BAC). Speaking in an interview with Bloomberg at the annual meeting of the World Economic Forum in Davos, Moynihan clarified that while his bank is just as competitive as other major financial institutions, it carries a unique burden.
Specifically, Moynihan argues that as financial institutions fight against bad press, chaotic regulations, and economic headwinds, Bank of America’s rivals don’t have to work as hard because they are carrying a “CamelBak and a water, and we have a 250-pound backpack.” Among other things, that backpack contains Countrywide Financial Corp., a sub-prime mortgage giant that Bank of America acquired in 2008, and that has so far cost the bank about $40 billion in legal fees and settlements.
Bank of America’s earnings reports have been sprinkled with one-time charges related to mortgage-misconduct settlements that occurred at Countrywide before it was acquired. Investors have carried the costs in one hand and smart restructuring on the other, evaluating the pros and cons. That backpack is heavy, and will continue to be heavy, but Moynihan is right. Bank of America is definitely a top bank. The stock price is up 49 percent year over year…
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