Tomahawk, WI 11/14/2013 (BasicsMedia) –  Bank of America Corp (NYSE:BAC) CEO Brian Moynihan is optimistic that the bank’s wealth management unit is now geared towards growth. The second-largest bank in the U.S. in terms of asset base says that it expects growth in this segment to be driven by affluent customers who make up about 1 million of the bank’s 8 million total customer base in wealth management.

The bank has been talking positively about is businesses and official declaration that wealth management is growing at the desired pace comes as good news to investors who have been treated to a lot of lawsuit news. The bank has been on the headlines for all the wrong reasons due to its involvement in largely criticized mortgage deals. The main source of headache for BAC has been Countrywide, a mortgage company which transacted bad mortgage loans which caused clients and investors huge losses. Then there are also several other law suits that the bank is facing including investor class-action. So far, it’s reported that BAC has spent over $6 billion in settlements. Several other pending settlement cases are expected to cost the bank billions of dollars. The latest such suit is that being pushed by Fed over Fannie Mai and Freddie Mac in which the Fed requires the bank to pay about $864 million in connection to the bad loans transacted to the two mortgage companies.

Bank spells future

However, at the New York conference where the bank spelt out its future, such legal concerns where given a back seat. Instead, the bank looked at its opportunities and tried to explain how it’s going to capitalize on the so as to return real value to its investors.

The conference heard that the bank’s net income from wealth management business grew by 26% in the third quarter to reach $718 million. The bank’s main competitor in wealth management is Morgan Stanley. However, it hopes that its cost reduction strategy would help it beat the competition. Morgan Stanley acquired Smith Barney to bulk up its position in wealth management.

Bank of America Corp (NYSE:BAC)  also hopes that its strong position in wealth management business and higher margins in the sector would be ammunition to take on competitors. In order to boost its chances for bountiful harvest in this segment, BAC has enlisted so of the high profile wealth managers to join its various branches.

The bank is also continuing its cost cutting efforts so that even as it grows big in business, high expenses do not weigh down on its revenue. So far this year, the bank has reduced its branches to 5,200 from 6,100 in the earlier year. It’s now aiming at bringing the branches to 5,000. Technological improvements in the bank’s operations have also helped it to drive down its operational costs and this is expected to reduce even further according to the CEO.

Good things have actually started happing for BAC as the economic trend gets back on track. So far this year its stock has risen more than 23%. In the past 12 months, the stock is up about 53% as loan demand increase across businesses and individual customers. It’s therefore easy to believe Moynihan went he says that further growth for the bank is in wealth management.

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