Bank of America is poised to become a dominant provider of wealth management and deposit services. Low risk, high touch, low capital will generate fees far into the future.
Mortgage problems are finally behind them. Costs and exorbitant legal fees and settlements are a thing of the past.
Previous problems were attributable to poor capital allocation decisions. Given its current size there are no large mergers which could make senses to investment banker or fevered boards of directors. Besides the regulators are on duty and can be expected to scrutinize everything very carefully. Speaking of which B of A just passed the stress tests provisionally. They can still fail if they do not correct their homework properly.
Management was pretty cheeky when it announced a share buy back deal worth billions. That gets by the regulators but they did not seem to mind.
Most banks do well in a rising interest rate environment. Interest rates have only one way to go.
George Gutowski writes from a caveat emptor perspective.