BAC’s Lower Taxes, Higher Cash Flows to Allow Distributions

Bank of America (BAC) has enhanced its payouts since the second half of 2017 after it cleared its stress tests and built a strong balance sheet. As the Trump administration has lowered tax rates and operating cash flows have risen due to higher net interest income and non-interest income, bankers (XLF) are looking at higher repurchases to improve return on equity (or RoE). Bank of America is focusing less on an expansion of branch network globally.