After Bank of America released its Q4 Earnings report last week, BofA's CEO Brian Moynihan held a conference call with analysts. One of the analysts asked Moynihan about the drop of interest-bearing deposits. Moynihan put some of the blame on the debit card fee snafu, but most of the blame was put on its deposit strategy which is to reduce deposits since it can't put it to work. Here are excerpts of Moynihan's reply. Full transcripts are provided by Seeking Alpha
But from a deposit strategy, just remember overall a couple of things. One is if you look at our deposit pricing, we have been very conservative as rates have stayed low to make sure that we continue to bring that pricing down. In the retail world, we're down to 20-odd basis points
our banks are extremely liquid. And so taking wholesale-oriented deposits both domestically and internationally, we've been just cutting that back dramatically.
So I'd say that yes, we had some impact from the $5 debit fee. That's why we made a decision to reverse it. Those impacts in the scheme of things will be manageable, but more importantly, the real deposit phenomena is we're seeing growth
frankly, we can't put the money to work right now.