"Commercial real estate is a slow burn — it's a classic burn," Moynihan said in a Bloomberg Television interview Tuesday from the bank's trading floor. "The trading attitude, which is these assets have to move at a price tomorrow morning, isn't the way the banking system works."
Last year was a bleak one across the banking industry. In the first half, dozens of regional lenders swooned — and some collapsed — as rising interest rates slashed the value of assets on their books,
"We work with clients — you take a building and figure out what the ultimate end state rental rolls will provide, you refinance it, sometimes that wipes out the equity, sometimes it doesn't," Moynihan said. "We're careful in how we underwrite as an industry."
The market disruption across the board last year allowed
"We're really making investments in our team," Stewart said. "We continue to hire more bankers, and we're making a lot of investment in digital."
Moynihan said the quarter has been strong for its trading business, and that investment banking revenues across the industry have stabilized. The firm reported net income of $26.5 billion last year, down from $27.5 billion in 2022. The Charlotte, North Carolina-based company has said it's focused on keeping expenses in check and has used attrition to bring its head count down without taking a meaningful severance charge, which can be a drain on profit.
The bank is on track to meet its previous guidance for net interest income this quarter, Chief Financial Officer Alastair Borthwick said at a conference this month, with investment-banking revenue up as much as 15% from a year earlier and sales and trading revenue likely to be little changed.
Moynihan, one of the longest-serving heads of a large U.S. bank, has signaled his interest in staying on for years to come. He reiterated that he remains uninterested in a Washington post, saying, "I've got a great job here."
