Bank of America Sets Ambitious Profitability Targets Amid Competitive Growth Strategy

Bank of America has raised its medium-term profitability target to a return on tangible common equity (ROTCE) of 16% to 18%, up from its previous mid-teens forecast. CEO Brian Moynihan outlined an expansion plan into six additional U.S. cities, aiming to capture more market share and increase returns.

Bank of America announced an increase in its profitability target on Wednesday, aiming for a 16% to 18% return on tangible common equity. This move is part of a wider strategy by CEO Brian Moynihan to boost the bank's performance and match Wall Street competitors through tech investments and expansion.

The bank, which achieved a 15.4% ROTCE in the third quarter, plans to expand into six more U.S. cities. This effort is expected to give the bank access to over $222 billion in deposits, thus strengthening its presence in student, family, and employee banking sectors.

In investment banking, BofA seeks to increase its fees by up to 100 basis points over the next few years. Despite a noted improvement in its M&A pipeline, the bank must overcome competitive pressures as it looks to capture a larger market share in trading and wealth management sectors.

(With inputs from agencies.)