“Analysts might wonder whether the talk of inflation, recession and other factors could [result] in a slower spending growth,” Moynihan said Monday during a conference call to discuss third-quarter results that topped analysts’ expectations. “We just don’t see here at Bank of America.”
The bank’s customers continue to spend freely, using their credit cards and other payment methods for 10% more transaction volumes in September and the first half of October than a year earlier, Moynihan said. While price inflation accounts for some of that, the number of transactions also rose 6%, he said.
Customers’ account balances remain higher than before the coronavirus pandemic struck in early 2020, Moynihan said, indicating that they were in a good position to continue spending. That is especially true for those who had the smallest balances, which were about 5 times higher than before the pandemic, according to a Bank of America chart.
Finally, consumer credit remains pristine, with late-payment metrics still well below pre-2020 averages, Moynihan said, indicating that so far, customers had little difficulty keeping up with their debt.
“We’re just now seeing [a] gradual move off these lows in early-stage delinquencies; late-stage delinquencies are still 40% below pre-pandemic,” Moynihan said.