It’s the start of the new earnings season, and Bank of America, among the first companies out of the gate, set a positive tone Monday (October 15) when it released its third-quarter financials — a report that showed mobile banking growth, along with other gains.
Bank of America cut expenses and reduced its provision for credit losses as the financial institution also beat analysts’ revenue and earnings expectations. Bank of America, in reporting its latest financials on Monday, also said that Zelle P2P payment transactions increased 138 percent year over year.
Revenue increased about 4 percent year over year, hitting $22.8 billion, higher than analyst expectations of $22.67 billion. The financial institution reported earnings per share of 66 cents, which represents a 43 percent year-over-year increase and is above analyst expectations of 62 cents. Net income grew 32 percent to $7.2 billion.
Bank of America said its provision for credit losses decreased $118 million during the third quarter of 2018, to $716 million. “The net reserve release was $216 million, driven by continued improvement in consumer real estate and energy portfolios,” the bank said in its Q3 financial report.
The bank’s net charge-off ratio stood at 0.40 percent. In consumer banking, “credit card portfolio seasoning and loan growth” led to a $53 million increase in net charge-offs, to $853 million.
Combined consumer debit and credit card spending increased 7 percent in the third quarter of 2018, reaching $146.4 billion.
The financial institution also said it cut expenses by 2 percent during the third quarter, to $13.1 billion.
Bank of America continued to gain in mobile during the third quarter of 2018. The number of mobile banking users increased 10 percent, to 25.9 million consumers, and mobile channel usage was up 17 percent. The bank said digital sales accounted for 23 percent of all consumer banking sales in the third quarter — that compares to 24 percent for the second quarter of 2018.
As for Zelle, the financial institution said that during the third quarter, 42.5 million payments were made through the platform, which is more than double the payments made during the same period last year. The digital payment app, which enables consumers to send money to friends and family, reportedly is gearing up to expand its offering to enable customers to pay small businesses.
Bank of America also reported growth for its virtual assistant named Erica. Launched about two years ago, Erica relies on artificial intelligence to provide tips for mobile phone users to enhance their finances. Since that launch, the financial institution said Monday, “3.4 million users have completed 11 million interactions with the virtual assistant.”