Summary
Bank of America Corp. posted quite good results for the third quarter of 2018, reasons cited being the tax cuts from last December and rising interest rates.
The bank posted a return on shareholders' equity of 11.0 percent, breaking through the 7.9 percent high of CEO Brian Moynihan's previous best effort during his tenure.
The investment banking area seems to be in a slump, however, and will have new, strong leadership starting in January 2019.
As readers of this post know, I have not been a big fan of Bank of America (NYSE:BAC) Chief Executive Officer Brian Moynihan.
The reason for this judgment was that Mr. Moynihan seemed to be unable to craft a plan that would bring the bank’s return on shareholders' equity up to, or above, a 10 percent level, the rough rule-of-thumb for the cost of capital of major US commercial banks.
Mr. Moynihan took over the top position at Bank of America in 2010. In 2011, the bank’s return on shareholders’ equity was 0.6 percent. In 2017, all the bank was able to produce was a 7.9 percent return on shareholders’ equity.
