Like most banks, Bank of America is struggling to grow its top-line revenue. While the bank has been able to increase profitability by cutting costs and releasing reserves in order to consistently grow earnings, the bank will ultimately need to increase its lending.
However, in the current low interest rate environment, the spread that the bank makes between what it costs to fund the loan and what it ultimately collects has been squeezed.
In this video, Motley Fool banking analysts Matt Koppenheffer and David Hanson debate whether or not the bank should increase its lending to fill the short-term revenue gap.
Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.
The article Should Bank of America Be Lending More? originally appeared on Fool.com.David Hanson has no position in any stocks mentioned. Matt Koppenheffer owns shares of Bank of America. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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