Bank of America outlines plans for earnings growth and AI in first investors day in years

Bank of America (BAC) CEO Brian Moynihan pledged that the nation's second-largest bank will deliver higher profits in the years ahead during its first investor day in nearly 15 years.

“There’s no cap to our ambition,” Moynihan said during a Q&A with analysts in Boston.

Bank of America laid out those ambitions in a presentation on Wednesday morning and forecast its earnings per share would grow 12% annually over the next three to five years.

The 66-year-old Moynihan, who has been BofA CEO since 2010, has kept his bank on a conservative path that he's dubbed "responsible growth." But in more recent years, BofA's stock has trailed its five closest banking giant peers, with critics now wondering whether investors may have lost out due to the bank's risk-averse approach.

BofA’s stock fell 2% Wednesday before paring losses.

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It's up 19% for the year, outperforming the S&P 500 by 3 percentage points, but has lagged behind all of its peers over that time frame, as well as a wider five-year stretch.

“Can we grow faster? We have the plans to do that,” Moynihan said during his opening remarks.

It also set a target range of 16% to 18% over the coming years for a key profitability measure known as return on tangible common equity (ROTCE), which tells investors how much return the bank is generating from its operations.

The increase compares to Bank of America's reported 14% ROTCE so far this year and was in line with what analysts expect, but it was far below targets set by each of Bank of America's major divisions, as some noted.

The bank also set targets for each of its divisions. Its consumer bank is aiming for to $20 billion in profits while its global wealth and investment management unit is shooting to grow revenue twice as much as expenses, each over the next three to five years.

Within its Wall Street operations, the investment bank wants to add 50 to 100 basis points of to its market share of global dealmaking fees and its markets business projects to nearly doubling its full year revenue (+42%) by 2030.Under pressure? Bank of America CEO Brian Moynihan attends "Mornings With Maria" at Fox Business Network Studios on Oct. 28, 2025, in New York City. (John Lamparski/Getty Images)·John Lamparski via Getty Images

“At first blush, this is a down the fairway update for BofA, with the top and bottom-line growth targets generally a continuation of recent trends,” TD Cowen analyst Steven Alexopoulos wrote to clients Wednesday from the event.

Bank of America could achieve a higher return measure based on the specific targets disclosed by each of the bank's divisions, Goldman Sachs analyst Richard Ramsden also noted Wednesday.

“We always are more conservative because nobody remembers in three years what the conditions were," Moynihan said earlier Wednesday during a briefing with reporters when asked about that disconnect.

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A core part of how the bank plans to up its profitability comes down to getting more efficient. It's aiming to cut its so-called efficiency ratio to a range of 59% to 55%. For the first three quarters of 2025, that figure has been 64%. This metric tells investors how well a company is using its resources to generate revenue.NEW YORK, NEW YORK - OCTOBER 20: People walk by the New York Stock Exchange (NYSE) on October 20, 2025 in New York City. The Dow closed up over 500 points Monday ahead of the corporate earnings report. (Photo by Spencer Platt/Getty Images)·Spencer Platt via Getty Images

Key to that push is leaning into artificial intelligence in nearly all parts of the bank.

From putting together pitch decks for BofA's investment bankers to using its proprietary AI-driven chatbot Erica to cut down on call center volume and help call service reps and bankers alike better cross-sell products to phoning-in customers, Bank of America showed how it's working to do that.

Read more: 5 ChatGPT prompts to help you build a better budget

"We are deploying AI in all areas of the company, and this is really different from past cycles of innovation," said Jeff Busconi, a global strategy executive for Bank of America.

"There are many more cost pools to go after, and we're just getting started," Busconi added.

The bank's view for now is that this will not mean lay offs so much as slower hiring growth firm-wide.

The company is familiar with this strategy; it lowered its headcount by approximately 81,000 between 2010 and the end of September to 213,384 positions, according to filings.

With Bank of America and other major financial houses rushing to capitalize on the AI frenzy, the concern of slower growth in finance jobs is real. Headcount is expected to fall 10% to 20% over the next three to five years across Wall Street, according to a recent forecast from compensation consulting firm Johnson Associates.MANHATTAN, NEW YORK, UNITED STATES - 2025/06/09: Sign at the entrance to a Bank of America branch in Midtown Manhattan. (Photo by Erik McGregor/LightRocket via Getty Images)·Erik McGregor via Getty Images

A more mechanical portion of its plan for higher profits is Bank of America’s continued reallocation of maturing securities on its balance sheet. It's still bearing hundreds of billions of dollars in lower-yielding securities it deployed before the Federal Reserve began raising its benchmark policy rate.

Between next year and 2031, BofA said it plans to replace $450 billion to $490 billion of those lower-yielding assets. It also aims to lower its capital in light of recent test results from the Federal Reserve.

One subject where Moynihan didn’t give a firm answer: when he plans to retire as CEO.

He said in September, as part of a wider management shuffle announcement, that he wants to hold his joint positions as CEO and chairman of BofA’s board through the end of the decade.

But he did tell Yahoo Finance's Brian Sozzi on camera, “The board selects the CEO, and I have no contract, so they could make a decision tomorrow, but the reality is, they're very happy with how we run the company.”

Additional

David Hollerith covers the financial sector, ranging from the country's biggest banks to regional lenders, private equity firms, and the cryptocurrency space.

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