Brian Moynihan's Low-Risk Mantra

'Responsible growth' has helped Bank of America avoid some messes but also caused it to miss out on some deals

- Katherine Doherty

At the time, the two words seemed like a passing thought. Bank of America Corp. Chief Executive Officer Brian Moynihan uttered them seven years ago as he outlined plans for the bank after settling a slew of financial-crisis-era probes and lawsuits. But the words have come up again and again, including on 30 consecutive earnings calls. Moynihan repeated them 12 times in US Senate testimony in September, and his lieutenants invoke them whenever they address the public.

The mantra is "responsible growth." It means that "market share is not the only thing," says Moynihan.

What's more important is profitable market share and profitable customers, he says. "It's customers that stick with you. That's responsible growth." For a big-bank CEO, it's pretty radical thinking.

It's not that the bank is blasé about competing. It's just not keen to take the types of risks often needed to reach No. 1 in market share. To Moynihan, steady revenue that avoids blowups is far preferable.

If it's possible for two words to change the culture of a Wall Street institution, that may be the case at Bank of America. They extend into almost every facet of the bank's operations. They guide decisions on who gets loans and which clients are allowed to make big bets. Dealmakers must explain it to corporate clients. Senior executives drive the point home in town halls. And recruits say they have come to accept the responsible growth philosophy.

The approach has allowed Bank of America to avoid some expensive messes-political and financial. After Russia invaded Ukraine in February, Goldman Sachs Group Inc. and JPMorgan Chase & Co. helped clients speculate on Russian debt. But Moynihan told senior credit-trading executives he didn't want them engaging in activities that could entangle the bank in the crisis.