Bank of America: Zelle Volumes Surge 25% Year Over Year

Bank of America’s digital evolution continues.

The company posted December quarter results that showed digital volumes are on the upswing, as active digital users topped more than 46 million, up 4.5% from a year ago.

Digital “sales” as a percent of total sales came in at 49%, per the company data.

P2P volumes through Zelle gained 25%, to $101 billion.

Erica active users and interactions were up a respective 12.1% to 18.5 million and 16% to 170 million.

Delving into overarching spending and savings trends, BofA’s materials showed that combined credit and debit spend was up 3% year on year to $228 billion.

The net charge-off ratio of 0.45% was 0.1% higher than a year ago.

CEO Brian Moynihan said on the conference call with analysts that spending growth has moderated to recent rates, down from double-digit percentages at the beginning of the year, which he said is “more consistent with a 2% GDP [growth] environment and a lower inflation environment.”

Though consumer deposits were down 8% year on year, they are still more than 30% higher than pre-pandemic levels.

“The deposit outflows you’ve seen in consumer have largely been driven by the higher balance accounts who move their excess balances into the markets to seek higher yields,” said Moynihan. He remarked that consumers are also “borrowing responsibly.” And 67% of the deposit balances have been from customers that have been with the bank for more than 10 years.

Strong Use of Debit Options

The CEO said that “60% of our checking accounts use their debit cards,” and added that they average 400 transactions per account per year. Net charge-offs, according to commentary on the call from CFO Alastair Borthwick, reflect a movement to normalized trends. He said the company also anticipates seeing single-digit loan growth in the year ahead and some “moderate growth in deposits as we move into the back half of 2024, given our recent deposit and loan performance.”

In remarks on the state of the consumer during the question-and-answer session with analysts, Moynihan said that “we see the consumer activity indicating that they’re still in the game, they’re still spending money.” The spending has shifted a bit, he said, as individuals and households are spending more on services and going out to restaurants than they are spending on goods and in retail environments.

“They’re working, they are getting paid, and have balances in their accounts and they have access to credit,” said Moynihan.