BofA must be less volatile and streamlined: CEO

CHARLOTTE, North Carolina (Reuters) - Bank of America Corp Chief Executive Brian Moynihan said on Tuesday the largest U.S. bank by assets must be less volatile and is continuing to streamline its myriad businesses worldwide.

Moynihan, speaking at the Barclays Global Financial Services Conference in New York which was webcast, said the lender must become more customer-focused, and not over-extend the company into areas that threaten the safety of the institution -- alluding to the financial crisis of 2008 that stressed the bank's balance sheet with billions in credit losses.

"We have to be much less volatile going forward," he said, noting the bank "stressed our capital at the wrong time" in 2007 and 2008.

Moynihan provided his most detailed description of the strategy he envisions for the largest U.S. consumer bank since taking the top job in January from predecessor Kenneth Lewis.

In previous public appearances, Moynihan has stressed execution on the company's business model, without providing specifics.

Moynihan, without providing specifics, said the bank's balance sheet will shrink in coming years. The bank also will continue selling off businesses that it judges unnecessary for serving its primary customers. Its primary customers are U.S. consumers, businesses and institutional clients.

Moynihan cited the on-going sale of Balboa Insurance, and the recently completed deals to sell minority stakes in foreign banks as examples of such noncore assets.

But the largest U.S. consumer bank's chief executive said the bank must make every BofA product and service to all customers, alluding to bank customers being able to access wealth management services offered by Merrill Lynch, which the bank purchased in 2009.

The bank's affluent customers, for example, hold $7 trillion in investable assets at other financial institutions. That money is being targeted by the bank, Moynihan said, for future growth of its wealth management business.

BofA continues to expand its international investment banking business, where Moynihan said global investment banking chief Tom Montag has hired 800 new employees overseas within the past year.

Currently, 75 percent of Bank of America's investment banking revenues are earned domestically and it is the second largest investment bank globally.

"If we move closer to a 50/50 split in those revenues, we'll be number one in the world," Moynihan said.

OUTLOOK

Moynihan also said the bank has enough capital to meet the proposed Basel III rules and the new requirements of U.S. financial reform, and "does not need a lot of capital to grow organically." Current capital levels, he said, were the right level for the company.

With excess capital, the bank will look to repurchase shares and raise the 1 cent dividend "as soon as we can," Moynihan said.

When the bank reported second quarter earnings it announced that it could lose billions in revenue due to the Dodd-Frank Act, the sweeping financial reform bill passed by the U.S. Congress in July.

At the time, Bank of America disclosed up to $2 billion in annual revenue lost from new curbs in debit card interchange fees and $1 billion from new credit card regulations, for example.

Now, however, Moynihan said the bank will be able to recoup most of the lost revenue through changes to its consumer banking model, to be implemented over the next 12 months. He did not provide specifics on how they will be changing the model.

Separately, Moynihan said demand for loans overall has not reached a bottom, though commercial and industrial loan demand has begun to stabilize.

Bank of America shares closed down 1.94 percent to $13.68 on the New York Stock Exchange.

(Reporting by Joe Rauch; Editing by Bernard Orr and Carol Bishopric)

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