Bank of America's CFO, Alastair Borthwick, recently provided an optimistic financial forecast for the bank and the U.S. economy at large. He presented these estimates during the BofA Securities 28th Annual Financials CEO Conference and previously at the Barclays Global Financial Services Conference.
Borthwick expects the bank's net interest income (NII) for the third quarter of 2023 to be between $14.2 and $14.3 billion, and around $14 billion in the fourth quarter. For the full year 2023, he projects the NII to exceed $57 billion, marking a growth of more than 8% year-on-year.
The CFO also anticipates an increase in Bank of America's Global Markets income on a year-over-year basis, although he expects this rise to be in the low-single-digit range. As for non-interest expenses in 2023, Borthwick predicts these will amount to $15.8 billion in the third quarter and $15.6 billion in the fourth quarter.
The financial outlook is largely underpinned by strong consumer spending trends in the United States. Borthwick indicated that consumer behavior, which accounts for approximately 60-70% of economic activity, should serve as a key indicator when assessing the state of the U.S. economy. Consumer spending has seen a year-over-year increase of 4%, supported by high levels of credit and debit card payments in the U.S., a trend that complicates predictions of an imminent recession.
Furthermore, Borthwick noted that consumer assets remain robust. He emphasized that discussions about credit quality normalizing are often relative to pre-pandemic levels when asset quality was exceptionally high.
In terms of stock performance, Bank of America's shares have seen a moderate increase over the past six months, rising by 3.3%, compared to a 7.5% rise in the industry overall.
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