Bank executives told investors a lot this week about the state of the industry — both in what they predicted for the near future, and what topics they studiously avoided.
Speaking at the start of the BancAnalysts Association of Boston’s virtual conference on Thursday, top officials of more than a half dozen financial institutions spoke in scant detail about commercial lending prospects, offered a mixed picture for consumer banking and downplayed election-related uncertainty.
Instead, they emphasized cost-cutting measures, noninterest income sources and their growing ability to cope with the customer-service challenges stemming from the pandemic.
They said they’re hopeful that the economy will withstand the resurgence of coronavirus cases, but several urged lawmakers to act as soon as they can on further stimulus.
Bank of America Chief Financial Officer Paul Donofrio called for “additional targeted stimulus” to help industries such as restaurants, recreation, airlines and cruise lines recover from COVID-19-related losses in revenue.
“Those are the types of industries we need to help, and likewise their employees are the ones that may be hurting on the consumer side,” he said. “That’s why we believe that additional targeted stimulus to support the impacted industry, including [Paycheck Protection Program] loans for small businesses as well as continued benefits for unemployed consumers, is needed to help get them to normalcy as we work our way through this health crisis.”
U.S. consumers have so far held up extraordinarily well during the pandemic, said Diane Morais, the president of commercial and consumer banking products at the $185 billion-asset Ally Bank in Detroit..
“I think the consumer today is still healthy,” Morais said. “We’ll see what will happen with the second stimulus. That will help. But so far, so good, knowing that it’s still early innings.”
BofA’s Donofrio warned that credit card and commercial real estate portfolios are two areas industry-wide to watch for high concentrations of credit losses in the months ahead. About one-quarter of Bank of America’s $63 billion CRE portfolio is made up of office space, while multifamily, retail and hotels each make up about 10%, Donofrio said.
He reassured investors that BofA feels its balance sheet will ultimately be resilient. “The portfolio is regionally diverse,” he said. “So I mean we feel really good about where we are.”
Executives from Regions Financial, in Birmingham, Ala., said that lending has slowed as their…