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Bank of America's net interest income poised to beat forecast

Bank of America Corp. Chairman and CEO Brian Moynihan said the company's net interest income for the year "might be a little bit better" than its previous forecast.

The bank is having success lowering deposit costs to offset declines in asset yields, Moynihan said at an investor conference Dec. 11, with more price reductions due for corporate accounts "in the next month or so."

"The world chased" rates on the way up, Moynihan said. Now that rates have fallen, "we've got to get back in the same sort of relative relation as a company that we had late '17 or '18 when the rate structure was" more comparable to its current state.

With yields on 10-year Treasurys still relatively low, "you've got to be able to drive the pricing back down ... and we're in the process of doing it," he added.

BofA had kept to its forecast that its net interest income could increase 1% in 2019, compared to the year prior, when it reported third-quarter results in October. At the time, executives said the company was managing through adverse interest rates better than anticipated.

Other banks at the investor conference also said their outlooks have improved incrementally as the interest rate picture has eased, including Wells Fargo & Co., JPMorgan Chase & Co. and PNC Financial Services Group Inc.

Moynihan said that BofA continues to set prices to achieve deposit growth of about 3% a year, a pace that is faster than economic growth and implies that the bank is adding market share. Overall, BofA's deposit costs remain low as the company relies on the strength of its technological capabilities to attract and retain customers and to achieve operational efficiencies. The company said that its total cost of consumer deposits — mostly non-interest expense overhead — fell from 1.83% in the third quarter of 2015 to 1.50% in the third quarter of 2019.