Bank of America Says ‘Resilient’ Consumers Help Boost Revenue

Healthy consumer spending helped buoy Bank of America’s revenues in the second quarter.

The banking giant reported quarterly earnings Wednesday (July 16) showing a consumer banking revenue of $10.8 billion, a 6% increase.

“Consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilization rates rose,” CEO Brian Moynihan said in a news release.

“In addition, we saw good momentum in our markets businesses,” he added. “So far this year, we have supplied more capital to our businesses and returned 40 percent more capital to shareholders in the first half of this year than last year.”

Among consumers, Bank of America (BofA)’s average deposits of $952 billion were modestly higher and up 32% over pre-pandemic levels, defined as the fourth quarter of 2019.

The quarter also saw average loans and leases of $319 billion, up $7 billion, or 2%. Consumer credit and debit card spending was up as well, rising 4% to $244 billion.

This week saw earnings reports from most of America’s other big banks. Among them was Citi, which posted record second-quarter revenues of $5.1 billion for its services businesses, an 8% increase year over year.

The bank’s personal banking decision also enjoyed a 6% uptick in revenue, driven by branded cards and retail banking.

Also this week, Wells Fargo used its earnings call to address the Federal Reserve’s recent removal of the asset cap imposed on the bank in 2018.

“We’re very carefully thinking through how we use the additional capacity to help grow the company,” said CEO Charlie Scharf.

“We expect that to happen over time,” Scharf added. “We never wanted to lead people to believe that there will be any major change in the next week, the next month, the next quarter, but it certainly does open options for us to grow and increase returns beyond what we’ve seen in the past.”

Meanwhile, PYMNTS spoke recently with Dani Lugo, the U.S. payments strategy lead at BofA, about the challenge of building lasting innovations in payments.

The question of whether those innovations endure, that report said, can often center on a deceptively simple question: Will people use this?

“Innovation alone doesn’t create impact. Adoption does,” Lugo said. “And adoption is achieved when behaviors [change, not just when the features ship].”