From the people who brought BankAmericard to market in 1958, which later turned into Visa, life is grand. With a successful Stress Test in hand, Bank of America sailed through the requirements, as they indicate on their website.
The Financial Times reports.
- Consumer spending across Bank of America’s debit and credit cards jumped 10 percent in the second quarter, demonstrating the resilience of consumers despite flagging economic sentiment.
- Brian Moynihan, chief executive of the second-largest US bank by assets, told investment analysts on Monday that the trend remained in place in July, saying that “consumers continue to spend at a healthy pace.”
- BofA said it processed a record $2.1tn in consumer payments in the first half of the year, driven by increases in every category including travel, gas, and services.
- Average credit card balances also rose 10 percent to $81bn in the second quarter, although they were still below the $93.6bn reported in the same period of 2019.
The Motley Fool, which published a transcript of the earnings call:
- Our asset quality remains very strong with net charge-offs in the second quarter of 2021 still 50% below pre-pandemic levels in late 2019 when credit was pretty good.
- Breaking down the performance by segment, I would make a few comments. Our consumer banking segment continued to see good momentum as we grew loans at the fastest quarterly pace in three years.
Similar to Chase, Citi, and Wells Fargo, Bank of America is ready for the storm.
Let us just hope consumers are ready, too.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group