Bank of America (BofA) has raised its return target as part of a new strategy to close the gap with Wall Street leaders. CEO Brian Moynihan announced the plan at the bank’s first investor day since 2011, signalling a renewed push to improve performance and capture more market share.
BofA now aims to deliver a 16%–18% Return on Tangible Common Equity (ROTCE) in the medium term, up from its earlier “mid-teens” projection. The bank posted a 15.4% ROTCE in Q3, while top competitor JPMorgan delivered 20%.
Analysts say the new target is strong but not aggressive. Argus Research noted the goals place BofA “in the upper tier of peers,” while Barclays analysts suggested the bank could have gone 100 basis points higher.
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To support its goals, BofA plans to expand into six new U.S. markets by 2028, including Alabama, Louisiana, and Ohio. The move opens access to an additional $222 billion in deposits, with a focus on student, family, and employee banking.
In investment banking, the lender aims to increase fee share by 50 to 100 basis points over the next three to five years. BofA remains behind long-time rivals JPMorgan and Goldman Sachs in global investment banking rankings.
The bank also targets a 9% share of the trading revenue pool, up from its current 7.6%. Analysts warn competition will be fierce as rivals also scale up amid an improving deal environment.
Shares were down 1.1% in pre-market trading following the announcement.
BofA says U.S. economic growth remains solid, although labour data shows emerging weakness. Consumer spending is up 5% this year based on bank data.
“Consumer credit is stable,” the bank stated, noting that lower-income segments may face pressure if the labour market softens.
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The bank expects net interest income to grow 5%–7% annually over the next five years, driven by loan growth and asset repricing. Profit per share is projected to grow above 12%.
Moynihan, who took over in 2010 after the financial crisis, has long emphasised “responsible growth.” The bank has rebounded significantly under his leadership, but investors are pushing for stronger returns in line with competitors.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.