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Both Bank of America and Wells Fargo released earnings projections this week. Bank of America reduced its expected annualized loss of revenue to $1.9 billion (from earlier projections of $2 billion). Wells Fargo trimmed even further, projecting a revenue loss of about $1 billion per year, down from its earlier estimates of $1.3 billion per year.
While those estimates are smaller, the truth is they are not diminished by much, and thus for the industry as a whole, revenue loss will still be significant. According to journalist Joe Rauch:
“At BofA’s investor day in March, Joe Price, BofA’s consumer bank chief, said the industry could lose $12 billion to $14 billion in annual revenue under the initial rule.”
With the rule revised to 21 cents from 12 cents, Mercator believes that the industry should still expect revenue reductions in the range of $9 billion to $11 billion in aggregate. Banks will be looking for opportunities in fees and new offerings in order to offset those declines in revenue.