We will go ahead and get started. So good morning, everyone. Welcome again to Bank of America's 33rd Annual Financial Services Conference. I'm Ibrahim Poonawala, Head of North American Banks Research for BofA. I would like to take this opportunity to thank all the management teams and investors for their partnership that has helped make this conference a huge success. As part of the conference, we are hosting over 300 institutional investors, over 120 corporates to discuss with us their outlook for the U.S. economy and their own businesses. I would also like to thank my colleagues in research, Craig Siegenthaler, who heads the coverage of diversified financials, asset managers, and brokers, and Josh Shanker, who heads insurance coverage for all the hard work in putting together a great event. So thank you both.
And I would also request you to save the date for our next year's conference, February 9th through 11th, 2026. So we look forward to seeing you next year. Now, none of this would be possible without the blessing of my next speaker. So without further ado, I would like to welcome my big boss, our keynote speaker, Brian Moynihan, Chair and CEO of Bank of America.
Before we get started, thank you to all the companies that have come and all the investors for showing up and supporting our conference. And thank you to you and your colleagues for running a good show. So thank you.
Thank you. I guess maybe just starting out, first of all, congratulations on 15 years as CEO earlier this year. If we think about the banking sector over this last 15 years, both for the bank, Bank of America, and the industry, if you don't mind spending a few minutes around the evolution that's taken place and where things stand today.
I think about it along two or three dimensions. One is the dimension post-financial crisis of the recalibration of the industry, both in the U.S. and on a global scale. And we can hit that quickly. The second is the impact of technology, which we're all talking about AI, but there's been a huge impact already in the industry and how that's impacted capabilities, headcount, everything else. And the third is the, in our company, but a lot of it is the customer focus of the industry. We came through a product-driven industry for years and customer focus. But on the U.S., look, at the end of the day, if you think about where we were prior to the financial crisis, the belief was Europe was going to be bigger than the U.S., China was going to be bigger than the U.S.
Economy-wise, and therefore the banks that emerged out of those systems would be bigger than the U.S. And here we are, 15, 17, 18 years later, the U.S. banks earn a lot more money. They're much better capitalized. The liquidity requirements are high. We took our lumps. We had some disappear. We absorbed some in our company and other companies, and off we went. And the economy is also one and a half, one and three quarters times bigger. And the European economy is not maybe 1.2 times or something like that. So that's the competitiveness of America. That's the resiliency of the system. Frankly, that's taking your lumps and getting on with it.
And then the safety and soundness and regulation that came out of a lot of that is an understanding of one key factor that we got to think about again, which was everybody should be under the same tent. So in 2007 and 2008, when we went to the Fed, there were participants there who weren't under the same tent, one of which is Merrill, one of which is GS, MS, et cetera, and Lehman. And a weekend later, we're all under the same tent. That changed the nature of how the regulation, liquidity, and requirements worked. So you didn't have arbitrages. And we got to be careful going forward there. The technology impact is really something else. And so we all talk about what happens next. But when the management team took over the company in 2010, we had 285,000 people. We peaked at 305,000 people.
Today we have 213,000 people. We have more customers, more activity, whether it's in the trading business, whether it's in the wealth management business, whether it's in the consumer business. All that activity is done with a lot less people. Now, the people get paid more because of the nature of inflation plus just the job content. And that tells you what technology will do. You went from Zelle wasn't around, Erica wasn't around, Mobile Check Deposit was still in its infancy, CashPro wasn't around. You take all the stuff. It's all there now. And now the question was AI, where you take it next when we talk about that. And so then the third in our company is really becoming customer-focused, consumer-focused on a consumer side, wealth management client focus, commercial client focus, and get away from the products that we grow relationships, not products.
That allows you to grow with four or five pillars. So Holly O'Neill is here and runs our consumer business with Aron Levine. They can grow along multiple dimensions as opposed to being, "I'm in a credit card business. I got to go to credit cards no matter what happens." That can tend to lead to interesting activity that's happening.
And just on that, if you could double-click on the customer focus, you hear that from all the banks that I speak to, bringing the entire bank to the customer. How well is the bank today in its current form equipped to do that where the various businesses are talking to each other?
First was to get all the products underneath the customer base. Whether it's consumers, mass market consumers to wealthy consumers, whether it's small companies to large companies, or whether it's investors, to get all the products underneath them and not have separate activities that happen. Over the years, we've made great progress. We at Bank of America knit that together. Here in Miami, a fellow named Gene Schaefer is the market president. I met with the management team in the market yesterday, including the markets business with Sebastian Haas, including the commercial banking business, the business banking business, et cetera. They all work, and we keep track in 100 markets or so we serve, of all the activity it moves beyond with the customers. There are two elements.
One is to actually think about in the wealth management businesses. Lindsay and Eric and Katy's obligation is to get the entire relationship, which means loans, trusts, asset management, brokerage activity, et cetera. So they have a direct obligation, and then their second obligation is to have their teammates in the market, like Miami, refer their businesses across each other, and we've made great strides. 9.5 million pieces of business moved within the franchise that way last year. We expect to do more this year. One of Lee's other jobs, Lee McEntire's other jobs, is he actually runs the infrastructure team behind this, and they do a great job, but that's a sophisticated understanding, which plays off of that customer focus, and it works.
I guess maybe switching gears to the macro outlook, we obviously had the inflation data this morning, but I think it feels like the Fed engineered the soft landing. But give us your view on what the economy looks like. Are there still areas that you worry about that are going to be under stress if rates remain elevated?
The answer is yes. We're worried about a lot. We always worry about a lot of things. But I think, look, if we look first at the various segments of customers and what we see, if you look at the consumer, as we came through last summer, the consumer started slowing down. And you can even see it in the confidence stuff that's reported out of Michigan and other things. And the spending started slowing down a little bit, not still 3.5%, which is fine. But because what the consumer is being told is, "Rates are high. It's restricting your activity," et cetera, et cetera, et cetera. So they all started to react to that. As it came in the fall, when the Fed first started saying, "We're going to cut rates," not even a rate cut coming through, the consumer confidence started picking up, the activity started picking up.
And so in the fall, you got a pretty good equilibrium going, 4%-4.5% growth of customer money movement out of our accounts, $4 trillion-plus a year going into the economy versus the year before. And interesting enough, as you come through the first part of this year and the first 40 days, we're up about 6%, call it. That's a little stronger. And that may be leading to some of the price pressures and demand side is higher. You got to be careful in the beginning of the year. There's stuff that runs through that's more you have to de-annualize. But even on the card data, which is more consistent, that's 5%-6%. So the consumer is in good shape and spending, which is good news for the economy.
But we got to be careful that they don't start spending at a level that drives prices up and inflation comes back in. I mean, you look at higher rates affect the consumer in some areas, car purchases. Obviously, the mortgage market affects it heavily. But you have to remember, if you think about a consumer, there's 60-odd, 70 million mortgage loans outstanding. They're all locked in. That's that part. The rental market, rates went up, and that caused stress in some consumers in terms of making rent payments. But the mortgage, they're fixed and they're locked in. And in some cases, even though it's a liability, it's the best asset a consumer has is a 2.5%-3% loan for 25 more years is a pretty good thing. So that didn't affect them as much. Effect on cars, effect on new mortgage production, new housing activity.
When you go over and credit cards, the rate structure is more driven by sort of people borrow and people don't. It's not a sense to when you go to the place that affects it most is small businesses and middle market companies. They use lines of credit. The basis went from 50 basis points to 5 plus. That is a lot more borrowing cost. And so they slowed down their borrowing. They picked up a bit, but they have yet to pick up a lot. So we're getting new customers to grow our commercial loan balances above the industry, et cetera. But if you actually look at the uses of lines by the current customers, it's basically 36% on average across middle market, small business. Think of that as being 40% pre-pandemic. So what's that?
They're using lines a little bit less, more because they're trying to figure everything out, more because the higher rate structure. You got to be damn sure that you've got a good activity. You can't guess if it's costing you 7%-8% to borrow. You can guess a little what's costing you 4% to borrow. And so that difference is so that's the most effective place. The capital markets, the activity is high. The spreads are tight. Stuff's going on. Hopefully, the deregulation will see activity. But the real bites in that mid-size, and you've seen the effect of it. And that's where the Fed has to be balanced, even though inflation's higher and holding rates higher. And our team had taken all the rate cuts off the table. Your team had taken all the rate cuts off the table for the year, et cetera.
They got to be careful that the real drag on the economy is still around that business segment, and the cost of borrowing is still high nominally from what they're used to. They will get used to it. It's not that high in historical measures, but from where it came from 15 years, it's higher.
I think maybe that's a good segue into we have a new administration in D.C. There's a lot of optimism around what that could mean around tax policies, just deregulation across the economy when you talk to banks and what it means for their clients. How do you balance that versus rates probably staying elevated? We've seen a lot of headlines on tariffs over the last week. Do you think there's enough out there for businesses to pull the trigger on big CapEx investments, or are most of them still in wait-and-watch mode?
If you think about the CapEx or the hyperscalers and all the people around that industry, that's through the roof. If you look at normal things, it's solid. And consumer spending is a little stronger. Business investment's solid. And so we see that in how people are using it. Look, our customers, if you came through last year in the small, medium-sized sort of backbone of America business, they were really confounded by the regulatory stuff. Rates bothered them, but the regulatory stuff bothered them. As you watch it come forward now, they're a little more worried about labor capacity, which is an interesting question when you think about all these policies and how it's going to work. And that's where I think the administrations have to kind of think it through what choices they want to make. But the reality is regulation was a big thing.
So, I think your team from sort of the research platform and then just common sense and talking to customers ends up in the same place. If tariffs increase cost, if inflation stays a little higher, I can handle it if I get some benefits from deregulation to reinvest in it. So there's a belief that the margin expansion deregulation will come. Taxes won't go up. And therefore, they'll have a little bit to absorb it. And they'll pass some price through the customer, and that mix will work out. We'll see how that plays out. But that's going to be a tension in the system for a little while here.
I guess maybe bringing the topic of regulation to the banks, we've had this view, and you can tell me if I'm wrong, but we may be seeing a bit of a regime shift relative to the last 15 years to a more balanced, predictable regulatory backdrop. Would you agree with that view in terms of we are moving there? And if so, how quickly can the industry get some relief on some of these issues?
I think you don't have to take your and my opinion. You can see it take place. What's happened with the Consumer Bureau in terms of stopping and putting some people in that point of view, they have to figure out the charter of that agency. The OCC is now getting people in place to go work. The Fed, Vice Chair for Supervision, has to be in. If you think in the FDIC has moved. If you think of all that, it appears the first step is let's stop everything and take stock. Then let's figure out what the right thing to go into business. That is a classic re-engineering effort, which is you stop everything, assess it, and then you go to the next step.
So what's going on in these agencies, instead of saying, "Okay, let's keep going business as usual, and let's then figure out what to do," they're saying, "If we stop everything, it's sort of the Hippocratic Oath. First, we do no more harm, and then we'll figure out what should go forward." I think the challenge for our industry is we got to make sure stuff sticks to the ribs. In other words, we got to have the right regulation, right size for different types of institutions, right size for common activity, uncommon regulation. It got past the point when we all pushed, even sued the Fed to change it. The idea is we believe it should come back, but we also believe it has to be effective. And that's where we got to make sure we get a balance.
Because if you just keep swinging this pendulum back and forth, it's hard to operate a company. And so some of these rules and regulations got way past what the intended statutes were. And Congress administration is going to use her authority to bring them back in line. And whether it's the capital rules, whether it's consumer compliance type activity, consumer laws, rules, regulation, whether it's AML, KYC, and changing thresholds to make that much more modernized, whether it's that. But remember, there was an act passed in 20 whatever, 2022 on AML. It was never implemented. So some of the stuff, they just got to go do what they were supposed to do.
And just, I think.
Look, at the end of the day, we need a well-capitalized, highly liquid, strong industry. If you go back and think about the financial crisis post, what we did is we took our lumps, recapitalized our industry, got the set of rules, and here we are with the best managed industry in the world, making money, serving its customers very well. Customers have access and capabilities that occur nowhere else. We support that multinational activity around the world, the capital markets, and all that. It works if you get it right. But it takes some art. We got past the point. Now we got to bring it back.
Got it. And just one quick follow-up on that. We saw the BPI, ABA sue the Federal Reserve on the stress test framework. Just give us a sense of, I mean, it's unique for those of us who watch this industry for a long time to see a legal challenge to the Fed. What does WIN signify? What does the industry expect to get out of this in terms of the transparency that we need from the Fed?
At the end of the day, the stress test capability and what we all do in our companies is a very good thing. The odd thing is, why would we? We've had the lowest loss in the stress test for almost every year. The volatility around the answer would go, I think we were 230, then 270, then 250, then 320. This is four straight years of basically the key driving assumptions in a small quarter. Unemployment goes from where it is to 10%. The real estate market goes down by 30-odd%. The stock market goes down by half. Four years in a row, the things don't change, but the outcome was very different. What we're saying is, wait, that makes no logical sense. Now, if you look at it a couple of years ago, remember we protested the expense base.
We have a bunch of our revenue in the wealth management business is driven by market lows. If markets go down, it should come down. They wouldn't let us change expense base. They'd assume that we had to pay all the financial advisors to save money next year if the market was down 50%. And the revenue we're getting is down 25% here. No, it doesn't work that way. Same with the team's investment banking. If there's nothing going on, we pay people a lot less. If there's something going on, we pay them more. And it wouldn't let you change anything. And so those types of things, I think the frustration was no matter how many times we talked about it, we couldn't get through. The lawsuit was more of a technical issue to preserve rights. I wouldn't be overwrought up about that.
The reality is even the Fed Chair yesterday and many times publicly has said, "We're going to keep working on this thing to get it right." The transparency of the models and stuff, it's interesting to the broad part of America. The last thing I'd want to do if I weren't in a banking system is have to go look at models about losses or something like that. You think of it. All I'm saying is, I think it was Brandeis said, "Sunshine's a great, whatever it is, a killer bacteria," whatever the word he used. It's the same thing. You put those out there, and people are going to say, "Wait, that doesn't look right. That expense base should go down." Then hopefully, you can get the things more accurate.
More sunshine.
Yeah.
Maybe just bringing it back to the bank, if you can. We've talked about 200 basis points of positive operating leverage. It feels like there's an engine in place for that. Give us a sense of how you think about in your seat when you're listening to all these businesses, the need for investments versus where these savings are coming from?
If you think about the eight lines of business we have, plus the control structures, we think about where we put money. At the end of the day, the common theme is, and there's common platforms like our cash management, GPS, we call it, business, or our employee bank investments business, or our workplace benefits business, those big platforms, and then the operational platform, technology platforms. If you think about those businesses, we have plenty of capital that doesn't really affect it. It's really the question of where you're going to put the next dollar of incremental expense, either for people expansion or for technology deployment. And so we invest $4 billion plus in technology code a year. We're driving that across the businesses. And the issues, you get to the point of how much can you do more than how much can you spend?
And so the team does a great job at Aditya Bhasin's team. We have, on a given day, 35,000-50,000 coders out there coding and stuff. Every weekend, we do several million lines of code, and the systems change and stuff. So they're driving that. And so that's really the question, where are you going to add people? So as we look across the company, we're adding people. In the consumer business, the people stay flat, but you're constantly taking people out of the sort of operation side and putting them into the customer relationship side. So if you go across, we had 100,000 people in consumer in 2010. We have 56,000-60,000 today. You had about 10,000 people, actually, relationship managers. Now you have 25,000. So you're making this massive change, and you keep making that change happen. So even though headcount stays flat, that reengineering goes on.
If you think about it, in the financial advisors, we're adding financial advisors. You think about it in commercial bankers, we add commercial bankers, business bankers. But what we do is constantly take it out of their side. And that allows us to keep the expense base from 2016 now the same nominal amount of dollars spent, which is pretty amazing. And yet the activity is much different. And that was taking out work that goes away and plowing in the front end. So it's really a question of who's got the need for technology investment. We've invested a lot in the cash management platform, invested a lot in international country buildout, invested a lot in the market, the new markets for consumer. We got nine more coming.
We've gone into we basically have a pretty good coverage of those markets, 165 new branches coming out, redone branches even to current markets. You start adding all that up, $5 billion in branches across time, $4 billion a year in technology initiatives, $12 billion overall technology spend. But it's just a lot of activity. But it's never a question of we have to make a choice, honestly. It's really who can get the stuff done in a rational enough time frame that it has the impact.
I guess just talking about digitization, talk to us a little bit in terms of the customer journey. We've seen increased adoption from the consumer on digital account openings, et cetera. Where does that stand in terms of digitization? And also maybe tied to that, AI comes up in every conversation when we're thinking about tech. How big of a needle mover you think AI could be?
So digitization, we put out the statistics. Half our sales or 58% are digital today, but 42% aren't. There are 4 million cards last year. So think about that number. There are 3 million net new checking accounts, 3-4 million gross. So think about just how much you can change. So Mobile Check Deposit, nobody writes checks anymore. That's not quite true. But there's a lot of checks go through, and they're deposited. So it just has a lot of activity. The current, what we think of, what we see with the combination of models now with AI models versus machine learning models and things and models of the past is a step change. So what we see in Erica is 20-odd million people using it a couple hundred million times a quarter, 175-180 million times or what it was last quarter.
All that activity would have gone through a call, even if it was a VRU call, answered by machine, so that's a big pickup, and the ability for it to learn and get better, and so we took that model, which was built first 10 years ago before people knew what a large language or small language model was. It was effectively a small language model. We had it built for us. We put it in Erica. That model is trained on our systems and our procedures, is exclusive to our data, has learned, and so we can bring that model to other places, so that model is embedded in CashPro now. That model is embedded in Erica for employees, which if you go into our company website or internet for the employees and click on it, you can change your password and all these things.
It took half the interfaces that would have gone through calls to a technology specialist to order your equipment, do this. It took half of them off in two months. And then we got to get the rest of them off. So the ability of AI to move this thing to another place is that. And our coding, if you think we have 35,000 programmers in the company, broadly stated, and another 15,000 working for us outside the company. And you say we can save 10%-15% with the coding techniques that we see through this AI developed code, that's a pretty good kick. Now, we'll get to 20% or 30%, maybe. But I'm in for 10%-15% to start. That's a pretty good number. And we can reinvest that all. So we can do 10%-15% more business delivery and stuff.
So we think it's very good. We got 1,000 patents issued and applied for AI techniques, and we're pounding away at it. And it's just going to have another effect. But don't unlink it from this long-term movement from work content being digitized, work content being driven by machine, work content going away. The difference is it can attack different types of work. And so let's think of a group that analyzes a lot of text, reformats it, puts it out, maybe called the research function.
I felt you were going.
And think about that. That's the difference. It can do that kind of work, which then you can sit in front of them and get a lot more efficiency behind it. So when Candace and the team said, "We need more analysts to cover these great financial services companies," they said, "Wait a second. This saves the 10% or 15%, 20% capacity need. That'll make you smarter, faster, more intelligent in light to access more data." It still has to have somebody in front of it because it comes up with some interesting stuff. I was trying to get a mortgage amortization schedule. I pounded into it three times, got kind of something you couldn't read. Finally just got a picture of a house because it gave up and just said, "Yeah." And that's not right or wrong. It's just still learning how to do this stuff.
I'm learning how to do the stuff with it. I think those things, so that's the major difference. Before, if you thought about the people we had in Tom Scrivener's operations group, you engineered that, and you did the Erica save calls going into Holly's call centers. This is now, wait, in the legal department, 1,000 people. Can we make it 10%, 15%, 20% better? The finance teams, can you do the kind of reviews and examination which make Alastair's team better? The risk side, 8,000 people in risk. Can you start to shave the growth rate of that? Look, we've run model-driven AML, BSA analysis. It's a very sophisticated model, but this helps it be even more.
Okay. Sounds like a multi-year runway in terms of this productivity boost for us, for the industry.
It may be a cliff. These things tend to take time, and then remember, the companies that your other teammates cover, like a Salesforce or something, all these guys are embedding it in their capabilities. So Mark Benioff with Agentforce that you're hearing a lot of talk about, Workday, all the major providers, Microsoft and 365, they have to embed this. So the race will be, do you want a separate model or is it going to come with a, is it dessert coming with the dinner, right, for Salesforce buy? And they'll embed it. The interesting thing is when it comes that way, you already have all that verification of all the data and all the information, which makes it easier to implement. And so that's going to be the tension. Do you want a separate big model? Do you want a separate small model?
Do you want a model embedded? And the real question is, is the data and information that feeds that model explainable? Because at the end of the day, despite other industries, this industry already is liable for anything it does. So if I underwrite a loan, our company underwrites a loan and turns you down for a mortgage loan, we're liable. We can't say, "Oh, the machine made us do it." So the reality is we already have. We don't need new regulation. No matter how you make the decision, you're liable for the outcome if it's wrong, discriminatory, whatever it is. And so the ability to do it, but the care is you got to realize you're liable for it. Therefore, you got to put a lot more controls on it probably than can go on if I'm just asking some questions of public demand.
Got it. I guess maybe just switching to some of our businesses. When we think about the consumer bank, I think there was an interesting stat we disclosed, about $500 billion of investments coming from the consumer bank. And yeah, on the investment side, just give us a sense of, is the consumer bank set up from a digital technology standpoint, incentives that are in place to increase wallet share from our existing clients?
No, that's the way it operates. So we have a concept called a stair step. And if you think about the broad American consumer, the first step is a core transaction account. The second step is a first borrowed account, typically a card, maybe an auto, something else. The third then is the investment. And you walk up that stair step. And you're just in a home loan and an investment. So you're walking up that stair step with a consumer. And we don't think we're successful until we get to the top stair, which is the four or five core needs of every consumer in America covered by our company. And we think our products and services are better than anybody else. And therefore, if a customer is not getting from us, they're not getting the deal.
And then the Preferred Rewards program knits that together and gives better value and some of the other rewards programs that we have. So that's the basic core. But if you think about, let's just take investments. The other thing is you have to think across time and what we call continuum. So if you think about investments, what we do with Merrill Edge, which is in our consumer segment, is think about it as basically getting investors with our company at an early stage. So 300,000 plus new customers year over year, average investment balance in those accounts, $7,500,000. So these are small, these are big accounts that people have. But they're not at the point where they can have an individual service, which is the FA model, the private banking model.
But the idea is if you do this right, what you're doing is pulling a whole bunch of people in. You got 100 people coming in the door. By math, by statistics, 20 of them will become wealthy enough that the financial advisory model will work for them, 20%-25%. The other 75% will invest their whole life, and we can do it digitally. You can execute completely digitally. With the portfolios built from Candace's team to Chris Hyzy's team, you can do automated rebalancing. Maggie, which is Merrill Guided Investing, has now $30-$40 billion in it that is automatic rebalancing, starting from scratch five years ago, whatever it was, up to that level. More and more investors put more money into that, very cost-efficient form from the investment side. That's a great model.
What that does over time, you think about it, a 25-year-old person making their first investments, things, when their first job started in the morning, they put more money in and out. They start to save. They have to put it to work. We open the Merrill Edge account, and then that person could be you in 20 years with all the wealth that you have, and now you're a private banking customer, and you follow that continuum. So our job is to cinch off the competition. The bank industry traditionally had a hole between consumer and private bank, the traditional banking. We all started working on that with securities of financial advisory platforms. We have Merrill, which is a whole different size, scale, and scope. But still, the principle is we got to catch everybody and keep them for their whole life.
That continuum with the capabilities that are the best in class for Merrill Edge, the best in class for Merrill, the Private Bank, says, "You never have to leave here, and we can grow with you." But look, if you don't have that kind of wealth or that kind of demand or that kind of customer need, you stay with Merrill Edge, and it's a pretty unique system.
Okay. Makes sense. I guess maybe switching to another business, global banking and markets. I think forever there's sort of been a narrative where the bank could be doing a lot more in the markets business. We made a lot of investments a few years ago in that business. Just talk to us how those investments panned out relative to your expectations. And is there more runway that you see to invest further?
This is markets. The serving clients out here with research, ideas, financing, et cetera, as opposed to corporate investment banking, which we can talk about separately. The investments we made in this business were really around three dimensions. One was people, talent, expanding here in South Florida, setting up the team to build out a team because a lot of people moved down here as an example around the globe, et cetera. One is talent and the trading talent, et cetera. The second is technology. And the third is balance sheet and capital. And so the business we're running, say, in the mid-2015, 2017 range, you're running, I don't know, $600 billion in balance sheet. I'll say today, now you run $900 billion. You expand the balance sheet fairly dramatically. A lot of it around financing capabilities and things like that.
The talent, we're in every trading venue in the world, and we keep adding the talent we need and doing that. And then technology. In the end of the day, across global corporate investment banking markets, we put about $1 billion of technology code in a year, new code, new stuff. It takes that kind of investment. And so to run those businesses and markets is a good chunk of that. And getting the data lakes and the information, being able to report the 3 billion quotes we have a day or whatever the number is out in order and be precisely right, it is a tough thing. So what's happened is Jimmy and the team have done a great job building that, getting all that done, talent, technology, et cetera. We expand the balance sheet.
And now he's moved, gained market share against everybody, and moved up in the fourth position so far. And we're three, four, one. It depends on the businesses and locations and stuff. But the idea is the constraint on Jimmy's growth is to make sure that we can get the customers to do more with us as opposed to whether he takes down another $2 billion of capital, which is kind of meaningless, or whether he has to build a balance sheet. You have to be careful of the G-SIB calculations and all that technical stuff. But they do a great job, and we're pushing on them. But you can't tell them just to grow. They have to grow and make money while they're doing it. And so the best thing they've done is lower the break-even for a quarter by $1 billion a quarter.
In other words, they dropped the level at which we make money in the quarter. We used to make money like three quarters, and then you lose a little money in the fourth quarter when activity settled down. Now it's basically you make money every quarter, and that range is over $1 billion to $500 million or more or less. That's pretty good. That was by cost exercise of dropping the break-even to like $2.5 billion of revenue from $3.5 billion of revenue.
Got it. I guess maybe just switching to the other part in terms of investment banking, there is a fair amount of optimism around a rebound in the investment banking wallet. How would you characterize our franchise and our ability to actually gain a market share?
We've been able to do that, Matthew Koder and the team, Alex. I mean, on Thomas Sheehan on the investment banking side, Lisa Clyde. We continue to gain share. We're sitting at three. It's a dogfight every quarter. In the glass half full, the fees, a billion and six a quarter, you feel good about. In the glass half empty, that's still where we were, 19. The size of transactions has gone up, and the numbers of transactions have started to pick up. We've got a lot of room ahead of us. That was going to take a different regulatory environment for M&A deals, especially. Those have been around a long time.
Even in this industry, clearly, but even in other industries, any deal $3 billion, $4 billion, or $5 billion, the advice you gave the client, Jeff Peek's out there has been doing this. The advice you had to give a client was, you really got to be sure that you've got this antitrust possibility read right. And the clients would look at you and say, you got to be kidding me, because they'd have lawyers and talk. And that was a reality. And so that's now probably changed, and you're seeing that go through. So there's enthusiasm that a lot of conversations can allow for structural consolidation in the industry, not just our industry, but across the board. And the ability to make those strategic buys, now pricing and everything else has to come true. The stars have to align.
But if all the stars aligned and it took you two years to get a deal done, not everybody had the staying power to do that. And then in this industry, I think it'll be much different, especially not for us. We can't make any transactions because of the limits have been for 30 plus years on deposit size and stuff. But for the broad industry, the capabilities of doing deals is high. So we feel good about that. So pipeline's strong. The IPO pipeline's strong. We got to make sure we get enough stability in the market for that IPO pipeline to pull through. The IPOs have traded up last year relative to the market, which had a strong year. The IPOs were up stronger. You've got to broaden out those IPOs a bit. But we see that.
We see the owners of those companies really wanting to get into market and willing to be pretty realistic about getting some liquidity versus top dollar. That ought to come through, but we just need a little stability. The discussion about all these policy changes has to settle in for people to do it. We feel pretty good about it. The teams, they're doing everything we thought we'd do this quarter, and we'll see how it plays out. It's still pretty early.
Got it. I guess maybe switching gears to the wealth management business. Talk to us in terms of when you think about the growth drivers for wealth and even the private bank. And maybe spend some time on. You mentioned the integration. I talk to our FAs all the time, and it feels like they find it a competitive advantage to have the bank behind them when they're talking to their customers. Just talk about the power of that integration that the bank's achieved.
I think there's a couple of ways that make it a little unique. When Merrill and Bank of America came together in the first day of 2009, there was a lot of stuff going on out there for a while. But basically, if you looked at it sort of thoughtfully, you had a financial advisory platform, and there's a thing called BAI, which is a Bank of America piece that went in. You had a bunch of loans deposited with what was then called a premier business that went in. So you end up with a much different business profile, more loans, more deposits, big wealth management business, in a business that was still going through the change from brokerage activity to AUM activity, et cetera. But what you also had was Merrill had 600 offices.
And about a third and a half of their offices were in places we didn't have retail banking. So if you take Columbus, Ohio, as an example, Merrill had a nice office there, a nice series of offices there, actually, but we had no branch structure. So the question we've been at over the last few years is, as we build out in the cities across America, one of the advantages we have is our digital capabilities and then the Merrill teams and some of the other businesses there that we can actually open up a lot of customer relationships quickly. And so that's sort of the things.
Then on a given day, look, at the end of the day, if you're providing holistic wealth management advice to a client and you only have a sliver of their relationship, you're either underserving them or they really don't trust you to the level that they say. So the question is, you ought to be able to get everything. And so some of that's more routine transactional accounts for the family and the kids and all that stuff. Some of it's very sophisticated, lending against art, lending against the other types of stuff that we have a great practice in. Some of it's very sophisticated in terms of estate planning and all the intricacies of all the different holdings and all the different types of things. Because if you look at a customer, they're going to have pre-tax holdings, after-tax holdings, trust holdings, and this.
You got to figure out how to do it, so an integrated approach leads you to get more stuff, and the backbone that sits behind the private bank at Merrill, whether it's the trust capabilities, whether it's the lending capabilities, whether it's the stock execution capabilities, all that is all a common platform that everybody can bring. And as we watch it play out, $280 billion deposits, I'm trying to think of the loans in the wealth management business and loans, I don't know, $100 billion or so, whatever it is. And those are margin loans and art loans and what we call mortgage loans. It's a big banking business. It's a big wealth management business. And that's good because it has a lot of customers. In the end of the day, you're serving the customer's full needs. And we're not asking customers to accept some inferior service.
We're excited to have the highest rated consumer transaction banking capabilities, personalized capabilities that there is. We have the best trust company in the world. These are not like, "Come, we're going to give you something that's off-brand," and we're giving you the best there is. And so that capability over time, we're just seeing that happen. That means those customers are even more loyal, bring more to us, tell their friends, and that's all good stuff.
A couple more. One, just talk about international and Bernie's business. We've invested a fair amount internationally. Just where we are in that investment cycle, what the aspiration is.
Yeah. So if you look across Bernie Mensah, that has the international business, his job is to coordinate with Matthew and Jim and Mark Monaco, and the GPS, Lisa Clyde, Alex, and Thomas, all the activities across the world. And Bernie's got to manage all legal entities and make sure all that happens. Plus, he's got to lead the customer interfaces, policy interface. So he does a great job doing that. But if you think about Bank of America, at the end of the day, we serve global clients, whether investors, whether large companies across the world. And so in the market side, we had pretty much been in all the major trading venues. Everything was fine. It was sort of building out capabilities, a little weaker at FX here, a little bit stronger here, do it. So we've been doing all that.
In the banking business, it was more getting coverage evened out across, even investment banking across industries and across locales. And the team's been doing that. And the commercial banking business, the corporate banking business, it had a lot more to do with cash management than corporate banking. And so we've been investing heavily in cash management. So a fellow named Mark Monaco runs that business for us, and we put several hundred million dollars a year in it, building out its capabilities. And that's where we've seen a lot of market share. So our global banking business has $500 billion plus of deposits. It's been growing much faster in the industry, and that's largely due to those cash management capabilities on a global basis.
So now, in the end of the day, Bank of America's global banking business, global commercial corporate investment banking, has more loans outside the United States than it does inside the United States, believe it or not. It's just the nature. So it's a $130 billion of loans. It's a big business for us. And then Bernie's job is to make sure it all works. And then the team has to execute one client at a time. Recently, with the disruption that went on in Switzerland, we added some bankers to build out our team there. So we doubled the size of the banking team pretty quickly in Switzerland to not only cover the larger clients better and with more breadth, but also beneath that to actually cover another size down of clients.
Countries that we feel confident that we can understand it and our cash management capabilities there that we can make money, we are now pushing into the UK, Switzerland, Germany, France. We're going down a little bit in size restriction in an effort to drive the business. They do a good job. We don't look at it as international versus domestic. That sometimes it's hard to explain to our team. We look at it as clients. To our global clients, we got to serve them everywhere. The research team has to, if you're going to research financial services, you got to know the whole globe's financial services outcome because your clients are buying that. If you're going to research auto, you got to know the whole globe's auto production, et cetera.
So we have teammates that specialize in Chinese auto companies and German auto companies, U.S. auto companies. Put that all together, we have a read. So I think these are global companies. We have to follow them, and we've done a good job.
One last one from me. Just around, talk to us about capital allocation and maybe even touch upon the dividend payout ratio for the big banks. 30% has been viewed as an implicit sort of cap around earnings payout. So one, how do you think about the dividend payout? And then how do you think about excess capital funding the business versus buybacks?
So I think number one, whether these hold true forever, they've held true in the past, is if the dividend payout ratio stays below 30%, you don't have to cut it. And you can go back and look at that research and do it. The second is if you have 6% tangible common equity, banks don't fail that much tangible common equity. So there's these sort of resolute, let's keep the balance sheet fortress and drive it. So we've always done that. Now, how can you increase the dividend? You grow the earnings. And then secondly, you take share count down. So the same 30% of an earnings number is a higher per share because of shares. So you have that math going in your favor. So we've increased the dividend at 8% this year, and it keeps moving forward.
But by keeping it low, when the pandemic hit, our earnings went from $30 billion to $17 billion. Our dividend coverage was $8 billion. It wasn't close, right? And so that was never the question. And so you always want to be able to keep that going forward. Then when you think about a dollar capital earned, our principle has always been about 30% out in dividends. The other 70% first is there to grow the business and whatever they need. And then after that, the rest goes to share buyback. The reality is we're sitting with extra capital. And the reality is if the math gets cleaned up, the G-SIB indexing, things that make just general sense, if you have a number that was calculated in 2012 and it's 2025, you might want to look at the calculation. We're not radicals here. We're saying the economy's grown a lot.
We've kept our size, and now we're presumably bigger. If that changes, then I think we'll have more to send back. Right now, we're sitting on the excess capital. So the capital to grow demands are, if you think about it, we put $100 billion of loans. That's $10 billion of capital. So that's not a big demand in the grand scheme of things. Markets, the capital is there. It's really the impact on some of the calculations. So the amount of use of capital to grow the business is relatively straightforward. Then the rest goes out. And if we get relief that the 11.89% that we report today is $25 billion more capital than the 11.9% we reported in 2019 to get the same calculation. That's what's been going on behind the calculation scenes.
And so we're saying if we can get that ironed out, why does it take that much more money to report that much stuff? It's all just RWA calculations and stuff that have been, and we're saying, wait a second, the risk hasn't really changed. And so if that happens, we should have more capital to either grow the business even further without having to ever retain more capital. But right now, we're basically, we pay out the dividend, and the rest of the capital goes back out in the market because we grow about $1 billion in capital per quarter, maybe more or less. And that just funds the incremental growth in the balance sheet.
We're already out of time. Just wanted to see if there's any room and if there's any question in the room.