PYMNTS MonitorEdge May 2024

Bank of America Says Zelle Transactions Climb 27% Year Over Year

Bank of America

Bank of America’s earnings showed a continued surge in P2P volumes, as Zelle transactions climbed double digits, measured year over year.

As noted in presentation materials released Tuesday (Oct. 17), the bank said that digital adoption, overall, has touched 74% of the bank’s consumers, representing 46 million digital active users, and 3.2 billion digital logins. 

Zelle transactions gained 27% year over year, to 323 million. Zelle transactions are outpacing checks written by Bank of America clients by 2x.

CFO Alastair Borthwick said on the call that charge-off rates remain below pre-pandemic levels. 

The credit card net charge-off rate rose 0.12% to 2.27% in the third quarter, and it remains below the 3% level seen pre-pandemic. 

CEO Brian Moynihan noted on the conference call with analysts that “in our customer data, across our 37 million checking customers, we see their spending slowing down.” 

Consumer spending, as measured across debit and credit purchase volumes, were up a bit more than 3% year over year to $225.3 billion. 

Spending growth has been holding at about a 4% level, he said, as measured year over year. And during the quarter, he noted, the company opened 200,00 net new checking accounts, and 1 million more credit card accounts.  

Digital Adoption Continues

With a bit more granular detail on digital adoption, “customer use of Erica continued to meet our expectations with almost 19 million users, up 16% in the past 12 months,” Moynihan said. CashPro app sign ins with business clients — through which firms manage payments, liquidity and receipts — were up 40%; payments tied to the app, overall, were $192 billion, up 16% year on year. Commentary from the call stated that BoA would spend about $3.8 billion on technology initiatives in 2024. 

The company had, at quarter end, $982 billion in consumer deposits, which management said on the call is $250 billion more than had been seen pre-pandemic.

Asked on the conference call about consumer spend — and how steady the trends might be — Moynihan commented that “the rate they’re spending, now, is consistent with lower inflation… [spending’s] been pretty steady for the months of August into September into October at this four, four and a half, 5% level.” Consumer balances, management added on the call, are returning to pre-pandemic levels.

Said Borthwick on the call regarding balances and consumer credit metrics, “we’ve got a slow growth economy in the plan. So I’d anticipate as we get back towards that kind of fourth quarter 2019 number, it’s going to normalize in there.”

Bank of America’s presentation materials show that within consumer banking, balances in checking accounts totaled $504 billion, down from $519 billion at the beginning of the third quarter. Balances in non-checking accounts stood at $348 billion at the end of the quarter, up from $371 billion at the end of June. Consumer investments and CDs increased from $115 billion at the beginning of the quarter and ended September at $131 billion.