bank of america's 4th quarter income, Released on Thursday (January 16) showed that the momentum of the digital shift continues, resulting in 61% of consumer sales being made through digital channels, up from 49% a year ago. Additionally, 78% of all banked households are defined as “digitally active,” up from 75% a year ago.
The company had 171.5 million interactions with Erica, its virtual financial assistant, in the latest quarter, up from 122.9 million last year. Zelle's peer-to-peer payments reached $127 billion in the fourth quarter, an increase from the previous quarter. Last year's fourth quarter was $101 billion.
CEO Brian Moynihan said in an earnings call that the company: Revenue grew Year-on-year comparisons for each business segment.
“This is what the economy looks like.” I'll solve it now “We aim to move to a 2-3% GDP growth environment,” he said, adding that the economy's healthy employment is boosting consumer resilience.,and The “strength of the American consumer” can be seen in our data. So far, in the first stages, two weeks Their spending in January is 4% to 5% year over year,” Moynihan said.
Increase in checking accounts
We also saw increases in net new checking accounts and new commercial accounts, which allowed Bank of America to expand its lending and deposit base. of the company The financial statements showed that meanwhile In 2024, the company added 1.1 million net new checking accounts and 4 million credit card accounts. Consumer deposits reached $942 billion in latest quarter and are on the rise a bit From $938 billion in the third quarter.
“Earlier this year, we emphasized our expectation that consumer credit would stabilize at normal levels,” Moynihan said. The credit card loss rate for the fourth quarter was 3.79%, an increase of 0.09% from the third quarter.
CFO Alastair Borthwick said commercial lending was up 5% year-on-year. After a year, I said Loan and deposit growth this year should be higher than last year.
Bank of America shares were down less than 1% on Thursday.
“This quarter's biggest news in the consumer industry” It's a deposit Because these are the most valuable deposits in the franchise, we believe that over the past six months, after several periods of gradual decline, a bottom has begun to form,'' the CFO said, adding, “Consumer It looks like bank deposits are here to stay,” he added. hit bottom Mid-August”
In a Q&A with analysts, Borthwick said Bank of America is seeing “more customer optimism, a little bit more activity, and a little bit more customer demand for loan growth.” said. These two things will give you a little more confidence in growing your deposits, Have a little more confidence around you loan growth — which one clearly It increases throughout the year. ”
Management is also paying attention above Since then, some believe that the average checking account balance has now stabilized at around $9,000. have The peak in the past few years was $11,000. — And checks help fund savings accounts.
Asked on the conference call about small business optimism and lending prospects, Moynihan said: that “in Our Business Banking Categories…We have a small business bank and a global commercial bank for the middle market. Even in such an environment, draw rates and credit facilities are still much lower than before. they were Pre-pandemic. ”
he said After the recent high interest rate environment, “their optimism has changed” as the regulatory environment could change and election uncertainty is a thing of the past, he said.
Moynihan added: “That's why there's some optimism.”eve We have to turn that optimism into action and we will see loan growth. ”
