Bank of America says rate cuts could reinvigorate mortgages and that its digital and cards strategies will help it grab more market share to offset shrinking margins.
Gains in the retail division helped drive overall profit to a record for a fifth consecutive quarter as mortgage activity surged and provisions for bad loans posted a surprise drop from the first quarter.
Total and core deposits fell in the second quarter from three months earlier at the Los Angeles bank as consumers sought higher yields, but CEO Matt Wagner said assuring proper funding for loan growth is a priority.
The likelihood of Fed rate cuts is causing banks to plan for less net interest income, but it would be a mistake for JPMorgan to back off its move into new markets and tech investments, Jamie Dimon says.
The company revealed its pretax losses for its forays into consumer and other digital banking services, which began in 2016 with the launch of a consumer deposit franchise and an installment loan product.
The company could rein in deposit costs, cut operational expenses and buy back more shares in anticipation of a Federal Reserve rate reduction. Other banks — especially big ones — could do the same.
