Our Data Digest this week is fueled by the onslaught of Q3 2015 reports coming out these days, but it’s far more than bank earnings that are being tracked. In addition to corporate banks, new reports in the quarter are unveiling trends in travel and expense management, venture capital funding in B2B payments and bitcoin — and PYMNTS breaks it all down below.
Banks Are Loving Their Business Customers
JPMorgan Chase, Bank of America and Wells Fargo all released their quarterly earnings reports last week, and while the financial institutions saw mixed results, corporate banking operations seem to be on the upswing.
At its earnings call held Tuesday (Oct. 13), JPMorgan Chase Chief Financial Officer Marianne Lake described the bank’s corporate operations activity as having “outperformed” this quarter, with its corporate and investment bank reporting $1.5 billion in net income, $8.2 billion in revenue and an adjusted ROE of 13 percent.
Analysts at Forbes noted that the bank saw more than $1.6 billion from card fees this quarter for the first time in four years, largely thanks to the strong use of its commercial cards.
Wells Fargo held its earnings call one day later (Oct. 14). During the call, Chairman and CEO John Stumpf singled out Wells Fargo’s new deal with GE Capital as a plan that will help propel the bank’s performance among commercial businesses. Wells Fargo announced only one day prior that it reached a deal to acquire GE Capital’s vendor finance and commercial distribution finance operations, in addition to additional corporate loan assets.
The bank’s CFO, John Shrewsberry, noted that Wells Fargo saw an expansion of its commercial lending business by $9.4 billion compared to the previous quarter — making corporate lending products half of Wells Fargo’s loan portfolio, he said.
Bank of America CEO Brian Moynihan said the bank’s corporate banking and lending operations are a major driver behind the bank’s growth, a segment that “moved in the right direction this quarter.”
“Loans to commercial and corporate clients around the globe grew nicely from last quarter and the year ago quarter,” said Moynihan.
The stats, released Wednesday (Oct. 14), showed that loan balances jumped by $26.8 billion fueled by commercial borrowing.
The bank also pointed to a new 1.3 million cards issued to consumers and businesses in Q3, though executives didn’t specify how many of those were made up of commercial card products.
Corporate Travel Goes Alternative
The year’s third quarter uncovered some dramatic shifts in the way corporations are spending money on corporate travel.
Travel and expense management service provider Certify published its quarterly SpendSmart report last week, which provided a whole slew of data for the T&E world.
As Uber continues to surpass taxi rides for business travelers, Certify’s report also found that, for the first time since it began the quarterly analysis, Uber surpassed car rental expenses in at least one city (Boston) this quarter. Other alternative travel services, including Lyft and Airbnb, saw their own highlights in the quarter, too.
The SpendSmart data also pinpointed Q3’s corporate leaders when it comes to business travelers spending money on them. Starbucks (unsurprisingly) topped the list of most-expensed restaurants, making up 4.83 percent of corporate expenses. Delta secured more than one-fifth of corporate travel expenses in the quarter, while Marriott hotels nabbed nearly 10 percent for corporate hotel spending.
B2B Payments Wins Big With VCs
Reports from Computerworld on Friday (Oct. 16) applauded the Software-as-a-Service industry, which saw the most funding from venture capitalists out of any other industry in the U.S. in Q3, enjoying $5.8 billion worth of investment.
In the list of top 10 startups that secured the most funding was AvidXchange, which secured an impressive $225 million last month from investors, led by Bain Capital. The accounts payable automation SaaS startup is now looking to boost its staff levels and enter new geographical markets.
Bitcoin A Bust For B2B
Lastly, while talk of blockchain technology and its potential to overhaul B2B payments loudens, bitcoin is on the decline, according to CoinDesk’s just-released report on the state of the cryptocurrency.
At one time, bitcoin secured similar chatter for having the chance to make payments — both corporate and consumer — safer and faster. Stats from Q3 2015, however, suggest it was all just a pipe dream. The data found that bitcoin purchases for the travel market, for example, dropped by 40 percent in Q3. Venture capitalists lessened their bitcoin investments by 10 percent in the quarter. Plus, analysts say, bitcoin remittances are also declining, in part because they are too consumer-centric and not focused enough on B2B application.