Bank of America chief commits to UK despite recent political and economic turmoil | Business news

The chairman and chief executive of one of the world’s biggest banks says he is “committed to Britain” despite recent political and economic turmoil.

Bank of America’s Brian Moynihan also told Sky News he was not worried about the prospect of a rise in corporate tax, adding: “We don’t live and die by our tax rate.”

Mr Moynihan said of the recent political turbulence in the UK: “We are not too worried [elections].

“It’s always something in the moment, but it’s the public’s job to elect officials, and ours is to run our company with this election in mind.

“I think the UK is one of the leading economies and leading countries in the world and is a bastion of stability in a general sense.

“And we have to get through the US mid-term elections, we have to get to the other side of that, and then stability can be established.

“So we always say our company has been around for over 230 years, we’ve been through a lot of choices and our job is to deal with them.”

Bank of America is the second largest bank in America with a market capitalization of almost $300 billion (making it about 10 times the size of Barclays, Lloyds and NatWest and more than three times the size of HSBC).

There are around 5,000 employees in the UK, mainly in London but also in Chester and Bromley.

Mr. Moynihan — one of Wall Street’s longest-serving executives — has led Bank of America since 2010, during which time the stock has returned 175%.

He touched on the very tough economic challenge facing the UK’s new prime minister, but was not too upset about the prospect of a rise in the UK corporation tax rate, rather than a cut, as Rishi Sunaka’s predecessor Liz Truss had planned.

“I think governments have to find a balance between taxing corporations, individuals and what they spend their money on – and that’s a long-term issue for all governments,” he said.

“People shouldn’t get involved in tax rates because it ends up putting them a little out of whack.

“So I think the key is to have a stable rate where people can invest over long periods of time, which is fair to the companies and the people they work for, and fair to the businesses they generate and the tax revenue , which they create, and then also fair to citizens, so that governments can do what they need.

“I think over time these things settle, they rise and fall.

“And you know, we don’t live and die by our tax rate, we live or die by having great customers who do great things with them — get great revenue, control expenses, get great pre-tax income, and then we’ll figure it out, what do the taxmen do.’

The corporate tax rate in the United States is 21% (with some additional fees depending on the state), which was reduced by President Donald Trump from 35% in 2018.

President Joe Biden has suggested it should rise again to 28%.

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The UK corporation tax rate is currently 19% and is due to rise to 25% by April 2023 – a rise which Ms Truss had planned to reverse but now looks set to remain.

Mr Moynihan was bullish on the global economic outlook, saying: “Our economists and most economists around the world are predicting recessions in various economies over the next 12 to 18 months.”

However, he felt that the US economy looked resilient.

“The U.S. economy is ultimately a consumer-driven economy.

“We see that our consumers, even in the first three weeks of October, are still spending 9% more than they spent last year, which is one and a half to two times what they were spending before the pandemic.

“And that’s good.

“Now, ahead of them, you know, we have the Fed raising rates and slowing the economy.

“At the end of the day, [US consumers] have good credit statistics and be able to borrow, so that’s good news.”

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Mr Moynihan was appointed to lead Bank of America after the financial crisis and is always on the lookout for the next potential challenge for his company and his industry, especially after the recent problem in the UK with some over-leveraged pension funds. Investment (LDI).

“We’re always looking, if you think about the Princess and the Pea analogy, under all those mattresses, you’re always looking for that pea to figure out where the risk is and where the risk is contained.

“And you’ve seen some that have come in when you’ve had particularly strong movement in gilts, in UK bonds.

“But the market likes stability now … and you’re seeing it calm down again given the circumstances of the last few weeks. But yeah, it was interesting. We looked around and asked: Where else could this infect the economy?”

“But the good news is that banking systems around the world are in pretty good shape.”