Podcast Episode Summary

Podcast: Bloomberg Talks

Episode: Wells Fargo Securities Head of US Large-Cap Bank Research Mike Mayo Talks Bank of America
Date: November 3, 2025
Host: Bloomberg Interviewer
Guest: Mike Mayo (Head of US Large-Cap Bank Research, Wells Fargo Securities)

Episode Overview

This episode features a timely conversation with bank analyst Mike Mayo on the eve of Bank of America’s first Investor Day in 15 years. The discussion focuses on Bank of America’s strategy under CEO Brian Moynihan, the need for renewed risk-taking and clear growth targets, and how the bank is positioned for the future. The latter part of the episode briefly shifts to Citigroup, analyzing CEO Jane Fraser’s leadership, issues of executive compensation, and comparison with other management styles.

Key Topics and Insights

1. Bank of America’s “Responsible Growth” Strategy

• Background: Brian Moynihan has led Bank of America (BofA) since the post-financial crisis era, focusing heavily on steady risk management.
  • "I think Bank of America under Brian Moynihan have been great risk managers, but this decade they've not been great risk takers." (Mike Mayo, 01:03)
• Critique: The time has come to emphasize the “growth” aspect of “responsible growth.”
• Expectation: Mayo urges BofA to adopt a more “opportunistic risk mindset” to drive stronger returns and justify its high-quality franchise status.

2. Targets for Returns and Growth

• Current Performance:
  • BofA is a top player in retail and wealth management, yet has underperformed in less traditional activities like wealth management, credit cards, and trading.
  • "For being such a strong bank, they've underperformed in terms of growth of the less traditional activities." (Mike Mayo, 02:33)
• Investor Expectations:
  • Mayo is looking for the announcement of a clear return-on-tangible-common-equity (ROTCE) target:
    • “I’m looking for a new return target of about 16% to 18%. So how they get there and how they put some meat on the bones for those growth strategies will be very important this Wednesday.” (Mike Mayo, 01:43–02:15)
• Growth Execution Challenge:
  • The bank must translate its strong deposit base—over $1 trillion—into new revenue opportunities, leveraging technology and relationships.
    • “They've had 3 billion interactions with their Erica chatbot for the past decade. Talk about AI. So that's really working … The challenge and opportunity is to leverage those relationships to do more.” (Mike Mayo, 03:28)

3. Succession at Bank of America

• Leadership Spotlight:
  • The episode highlights the recent appointment of two co-presidents (“Dean and Jimmy”) and discusses CFO Alister.
  • These executives are now positioned as potential successors to Moynihan.
  • “It'll be the first time we get to see those two individuals in their new roles and they're overseeing jointly Bank of America's eight lines of business. So the question is how are they going to instill extra intensity, growth and accountability?" (Mike Mayo, 04:07)

4. The Importance of This Investor Day

• Significance:
  • With such a long gap since the last Investor Day, expectations are high for clarity on growth, technology, efficiency, and risk-taking for the coming decade.
  • "What is Bank of America's plan from now until the end of the decade? How are they going to improve their growth? … This should be one of the most efficient banks on the planet with all the tech and AI that they've done." (Mike Mayo, 04:55)

5. Citigroup: Leadership, Compensation, and Culture

• Critique of Compensation Practices:
  • Mayo is outspoken about what he sees as excessive retention bonuses at Citi, especially in light of poor long-term shareholder returns.
  • “Citigroup CEOs have made, I think over $400 million in the last 25 years while the stock price has gone down 3/4 and the stock market's gone up 3X.” (Mike Mayo, 05:42)
• Jane Fraser’s Performance:
  • Despite opposing her retention bonus, Mayo praises Jane Fraser’s leadership and her “simple but powerful” new management accountability structure.
  • "Citigroup is my first, second and third top pick. So I love Citi stock. And I love what Jane Fraser has been doing. And I think they're going to succeed. But I might be wrong. And if I'm wrong, guess what? I'm probably going to make a lot less. And I think Jane Fraser should make less too. She shouldn't get a retention bonus now. At least until they get double digit returns." (Mike Mayo, 06:13)
• Call for Pay-for-Performance Culture:
  • Mayo draws a sharp line: deliver results before financial reward.
    • “It's kind of like you see someone in the gym ... but when it comes to game time, do they actually deliver? Next year is when they have to deliver.” (Mike Mayo, 07:16)

6. Are Management Consultants the Best Bank CEOs?

• Comparison between Jane Fraser (Citi) and James Gorman (Morgan Stanley), both former management consultants.
• Mayo gives nuanced take—no universal rule, but strategic consultants can bring valuable blueprints for complex organizations.
  • “It's not one size fits all … I think Jane Fraser, she has a great blueprint, architectural blueprint for how to run Citi for the next 25 years ... So I think that's a game changer for how Citi is going to perform and execute the next few years.” (Mike Mayo, 07:49)

Memorable Quotes

• On Bank of America’s Risk Appetite:

  • “There is no skill in never taking risk. You don't want them going back to 2007 when they took too much risk ... So I expect them to have more of an opportunistic risk mindset going forward.” (Mike Mayo, 02:48–03:20)

• On Citi CEO Compensation:

  • “Citigroup CEOs have made, I think over $400 million in the last 25 years while the stock price has gone down 3/4 and the stock market's gone up 3X.” (Mike Mayo, 05:42)
  • “If I'm wrong, guess what? I'm probably going to make a lot less. And I think Jane Fraser should make less too. She shouldn't get a retention bonus now.” (Mike Mayo, 06:16)

• On Succession at BofA:

  • “It could be one of those two [co-presidents]. Alister, the CFO, is ... a very capable CFO. So I'd say those—it's a three person horse race to become … the next CEO.” (Mike Mayo, 04:27)

• On Strategic Leadership:

  • “She has a great blueprint, architectural blueprint for how to run Citi for the next 25 years with the five lines of business and holding the five CEOs ... accountable.” (Mike Mayo, 07:49)

Timestamps for Key Segments

• Responsible Growth Approach and Need for Change: 01:03–02:15
• BofA’s Strengths and Growth Potential: 03:20–03:58
• Succession and Co-President Roles: 04:07–04:51
• Importance of the Investor Day and Bank's Plan for the Decade: 04:55–05:22
• Citigroup’s Executive Compensation and Leadership Culture: 05:42–07:34
• Management Consultants as Bank CEOs: 07:34–08:38

Conclusion

This episode offers a sharp analysis of Bank of America’s inflection point—calling for more innovation, risk, and strategic clarity as investors look for improved returns and accountable leadership. Mike Mayo, both skeptic and supporter, pushes for higher standards at both Bank of America and Citigroup, distinguishing meaningful performance from mere promise. The episode is packed with industry insights, candid opinions, and clear expectations for the future of two of the world’s biggest banks.