UPDATE 1-Bank of America CFO Says Loan Books Show No Sign of Recession

(Reuters) - Bank of America Corp's Chief Financial Officer Alastair Borthwick said on Monday that its loan portfolio was not showing any signs of a looming recession.

"There's this question of what will happen in the future, and there's what are we seeing right now. And what we're seeing right now, credit is in great shape," Borthwick said when asked about asset quality at a conference hosted by Morgan Stanley.

Consumer spending at the second-largest U.S. bank is up 9% so far this month compared to last year, while credit card balances remain lower than pre-pandemic levels, Borthwick said.

"It's sort of a testament to the health of the consumer, I'd say," Borthwick said. "They're not over-extended in terms of leverage."

Corporate clients are also faring well, with credit quality improving in the travel, restaurant and hotel sectors, Borthwick said. And as "the economy continues to heal," it is pushing the bank's corporate clients to borrow more, he said.

"Across the board right now, we're seeing reasonably good loans growth," he said. "We should see high single digits growth in loans. It's a good loans growth environment."

Borthwick's comments contrasted with those by JPMorgan chief executive Jamie Dimon made earlier this month.

Dimon said that inflation, the conflict in Ukraine and other challenges facing the economy were akin to a "hurricane" coming down the road.

Borthwick said the environment for investment banking fees has been "challenging," as fewer companies have gone public in the current volatile market.

Borthwick also warned they expect to report a $100-$150 million write down on its leveraged finance portfolio this quarter.

By Carolina Mandl and Elizabeth Dilts Marshall
Editing by Jonathan Oatis and Deepa Babington
June 13, 2022


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