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Should Bank of America Be Lending More?

By Matt Koppenheffer and David Hanson - Apr 17, 2013 at 8:29PM

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Bank of America's revenue is sluggish. Should it crank up the loan machine?

Like most banks, Bank of America (BAC -1.13%) 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. 

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