Digital channels continue to gain adherents in financial services, as Truist Financial Corp.’s latest earnings results showed Monday (April 22).
Earnings supplementals revealed that mobile app users were up 8% to 4.9 million year over year.
Digital transactions were 13% higher to 76 million.
The company said 77% of deposits occurred in self-service channels, and that there were 227,000 new Zelle enrollments in the quarter, an 11% increase from the previous quarter, with transactions up 40% over 1Q23.
During the conference call with analysts, Truist CEO Bill Rogers said that “loan demand continues to remain relatively muted, though we did see some improvement in our commercial lending pipelines during the quarter.”
And on the consumer side of the equation, there was an increase in loan applications, with the March quarter showing the first increase in loan balances since the fall of 2022.
Average deposits of $212 billion declined 1.2% vs. the fourth quarter of last year, reflecting continued consumer response to higher rates, the data show.
Non-performing loans remained relatively stable in the net charge off were within expectations, said Rogers. The net charge-off ratio was 0.6%, overall, in the most recent quarter, compared to 0.4% a year ago.
Truist CFO Mike Maguire said that revenue in the current year is projected to decline 4% to 5% year on year, as the outlook assumes three reductions in the Fed Funds rate with the first reduction coming in June 2024.
The company’s earnings materials detailed that non-interest income was up 6.1% due to higher investment banking and trading-related activity during the most recent quarter. Income from those operations was $323 million in the March period, up from $216 million in the year- ago first quarter.
“We still assume that net interest income will trough in the second quarter of 2024 and modestly improve in the second half of the year,” said the CFO. Net new checking account production was positive in the quarter, said Maguire, noting that the company added 30,000 new consumer and business accounts in the quarter.
During the first quarter, and within the digital channel, the company acquired 172,000 accounts, including 63,000 accounts new to the firm.
Elsewhere during the call, management illuminated some of the demand underlying commercial loan activity. Clients are having discussions about adding new warehouse capacity and new fleet of trucks, for example, as ways to expand their businesses.
Investors bid up the stock by a bit less than 1% at the start of trading on Monday.
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