Earnings

Bank Of America Reports $4B In P2P Via Zelle Network In Q3

Rounding out a slew of big bank earnings that came last week, Bank of America reported its third-quarter results Friday. Like its peers, it showed a slump in fixed income trading, but managed to largely beat Street expectations.

Mobile and digital initiatives continue to show traction, management said in discussing BoA’s latest Q3 numbers, with consumers placing relatively less emphasis on branch visits. Card and credit metrics were also positive.

Looking at the headline numbers, earnings of 48 cents for the third quarter were three pennies better than the Street, while revenues were $22.1 billion, compared to projections of just under $22 billion.

Like peers such as JPMorgan and Citigroup, fixed income trading was down double-digit percentages year over year – in BoA’s case, off 22 percent to $2.1 billion.

Overall lending activity was $927 billion, while the Street had looked for $920 billion. Consumer banking top line was up 10 percent to $8.8 billion, as deposits were up nine percent and loans grew by eight percent.

On the conference call with analysts, CEO Brian Moynihan said that “our mobile usage continues to grow. We had $1.2 billion mobile interactions this quarter alone, up nearly 20 percent from last year.” The recent mobile growth, across 1.2 billion logins, shows a volume akin to 1,100 branches, management said, and mobile interactions have doubled from three years ago.

Mobile deposits, said the executive, were 21 percent of all check deposits, and Zelle volumes were $4 billion as of the latest quarter. “We processed nearly 14 million transactions and the growth continues. We recently processed $0.5 billion in a single week … We’re also continuing to innovate. We’re rolling out auto-shipping across the country, home loans, mobile deployment is following that – and as we roll through the next couple of quarters, our artificial intelligence offering Erica will come out.”

Moynihan also said the company is in the midst of refurbishing all of its financial centers, an initiative that will take a couple of years.

Turning to the card business, the company said that debit and credit card spending were up 7 percent through the first nine months of the year. And consumer non-performing loans, said the company, are at the lowest levels seen since the second quarter of 2008, at $5.3 billion.

Chief Financial Officer Paul Donofrio told analysts elsewhere on the call that “we’re focused on, again, prime and super prime … We did see a modest pickup in NCOs year-over-year, but that was fully expected and planned for. So, nothing here from our perspective [is] unusual.”

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