Tax reform will provide a boost across multiple areas, for consumers, the broad economy and Wall Street, Bank of America CEO Brian Moynihan said Tuesday.
With Congress on the cusp of sending a bill for President Trump to sign, the head of the second-largest U.S. bank by assets strongly touted the benefits of a measure that will slash corporate tax rates and provide various levels of breaks to many individuals.
“By and large, we pay a lot of taxes and we’ll get a benefit,” Moynihan said during an interview with CNBC’s “Squawk on the Street” program. “Really, the benefit will be in American society and the broad economy.”
BofA has been the best performing big bank on Wall Street this year, with shares surging nearly 32 percent as it has benefited from a looser regulatory environment and as rising margins have helped offset the decline in trading that has affected multiple institutions.
The firm on Tuesday announced it was buying back an additional $5 billion of shares through mid-2018, seemingly good news though shares were little changed in morning trade.
Moynihan said the buybacks were the result of the company having strong levels of excess cash — an 11.9 percent capital ratio compared to the required 9.5 percent, translating into up to $25 billion.
“Our job is to move that out,” he said.
That happens against a conducive backdrop in which the company has seen “fairly consistent” loan growth and a growth in both the U.S. and global economy that is helping offset some of the other weaker parts of the business.
In addition to proving that “a pro-business environment exists” in Washington, tax reform will help boost and economy already showing signs of breaking out, Moynihan said.
Holiday shopping showed a sharp gain this year, as judged by the jump in receipts BofA saw from credit and debt card purchases, he added.
“That means things are going on in the economy, which is good,” Moynihan said. “The consumer’s in good shape.”
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