BofA Beats 3Q Estimates on Investment-Banking Boost

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00:00What a morning. What a 24 hours for bank earnings so far. Chris, you said credit issues. How many

00:05credit issues do you see? Well, for B of A, it's very limited this morning. They had a very small

00:10change in past dues. They had non-accrual loans behave very well. And the charge-offs were

00:15excellent. So, you know, you have to like what they did in the quarter. I think if you see

00:19problems, they did not emerge as of 930. So it's very encouraging on these credit details.

00:25What do you make of what's going on in credit, though, overall? Jonathan earlier in the morning

00:29was talking about this Jamie Dimon quote about if you see one cockroach, there's probably

00:33more on the way. Mark Rohn was talking about how it does not surprise me that we're seeing

00:36late cycle accidents. A desire to win competitive markets sometimes lead to shortcuts. Do you

00:42think this is going to become a problem in the years to come?

00:46Well, I think you're going to see incremental issues. And I think so. Will you see more problems?

00:51Yes. Is it something that the banks can defend with earnings and existing reserves and capital?

00:56That's also yes. So I think that they can handle this quite well. But it's like the weather changing.

01:01It's not going to be sunny and 75 degrees outside any longer on credit. We're going to have a few

01:05issues. And as we transition into fourth quarter, first half of next year, I do think you'll see

01:10more. It's just that the charge-offs have not been that great in the industry. And the banks

01:14continue to earn a lot of revenue to cover any shortfalls on credit as they emerge.

01:20Well, it feels like it's sunny and 75 degrees this morning for Bank of America. Even when you look at

01:24advisory revenue, this is coming from the banking side of the house, what's going on in the IPO

01:29market. We just spoke to a guest about revenue came in at $583 million, well above what analysts

01:35were expecting. Chris, is that where these businesses are really driving this growth in

01:40revenue?

01:42At this time, yes. I think that the spread income at the bank could come back. We still haven't seen

01:47enough loans go on the books at the regular wave bank business. But I think on the capital markets

01:52and trading side, it is very strong with a very good pipeline ahead.