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Chart 15: Would you want to see ASB partner with emerging online lenders to augment organic
growth?
70%
60%
50%
40%
30%
20%
10%
0%
Yes, partnership with online lenders provides a_ No, given the uncertainty around how these
good source of loan growth loans will perform during a credit downturn
Source: BofA Merrill Lynch Global Research
BB&T (BBT), B-1-7, Buy
Pent up demand in small and middle market corporates. COO Chris Henson was
upbeat with regards to the growth outlook for the US economy post the US
elections, particularly from middle market companies that have been extremely
cautious around making investments over the last few years. Mr Henson noted that
as business confidence rises on back of potentially stronger job growth and lower
tax reductions, BBT should see strength across its core banking operations.
¢ Out of M&A in the near term but looking to grow long term. Management
reiterated that it is out of the M&A game for now as it looks to execute on
delivering its targeted synergies from recent deals. That said, management expects
to eventually engage in M&A deals with BBT having the infrastructure for double its
size, noting that scale has become important in the current regulatory landscape.
When asked where investors would like BBT to focus on doing deals, 59% noted
that it would like management to pursue fee related businesses while 23% would
like management to prioritize dividend maximization.
Chart 16: Do you expect the deal activity in financial services to pick up Chart 17: Once M&A is back on the table, where would you like to see
in 2017? BBT focus on doing deals?
100% 70%
87%
90% : 60%
9
80% 50%
70%
9,
60% 40%
50% 30%
40% 20%
aN 10%
20% 13%
. 9 0%
10% Depository deals Fee-related Would rather they
0% businesses prioritize maximizing
Yes No the dividend
Source: BofA Merrill Lynch Global Research Source: BofA Merrill Lynch Global Research
¢ Well positioned from rising rates. Given the outlook for higher interest rates on
both the short and long end of the curve, Mr. Henson noted that while BBT tries to
maintain a relatively neutral balance sheet, it would expect to see upside in the
margin on back of higher rates. Additionally, higher long rates could also help drive
Bankof America a 2016 Future of Financials Conference | 17 November 2016 11
Merrill Lynch
HOUSE_OVERSIGHT_014325