Salem Radio Network News Sunday, October 1, 2023


Bank of America says healthy consumers will buoy retail unit in 2nd qtr

By Lananh Nguyen, Saeed Azhar and Nupur Anand

NEW YORK (Reuters) -Bank of America Corp expects good performance for its retail business in the second quarter, buoyed by resilient consumer demand, a senior executive said on Wednesday.

“The consumer is still very healthy,” Holly O’Neill, Bank of America’s president of retail banking, said at a Reuters Newsmaker event. “Savings and account balances are still well above where they were pre-pandemic, so … if there is in fact a mild recession in the second half of the year, they’re well positioned, with some cushion.”

U.S. consumer spending increased more than expected in April, boosting the economy’s growth prospects for the second quarter. While more households planned to purchase motor vehicles and other big-ticket items over the next six months, consumer confidence slipped to a six-month low in May as Americans’ assessment of the labor market softened.

Bank of America, the second-largest lender in the U.S., is focused on growing through its existing businesses and client relationships instead of making acquisitions, O’Neill said. Rival JPMorgan Chase & Co , the nation’s largest lender, bought First Republic Bank after it was seized by authorities earlier this month.

“We will certainly look at opportunities, but our focus again, is on organic growth,” O’Neill said. “I don’t think we feel undue competitive pressure.”

Consumer spending on Bank of America cards fell 1.2 percent in April compared with a year earlier, the first year-on-year decline since February 2021, its data showed. Yet the appetite for credit cards, auto loans and mortgages is still holding up, she said.

Meanwhile, even though delinquencies are near historically low levels, more customers are starting to fall behind on their payments, a trend that O’Neill expects to continue.

“We are seeing those numbers come back to closer to pre-pandemic, but that’s what you would expect in this type of environment,” she said.

In a wide-ranging interview, O’Neill discussed the bank’s use of artificial intelligence to power its virtual assistant, Erica.

“There are a whole host of uses,” O’Neill said, such as using Erica and generative AI to help bank employees look up information, policies and procedures.

The executive, a 27-year veteran of the company, also spoke about leadership in an industry that has historically lacked diversity.

“For women, in particular, I really try to focus on confidence and risk-taking,” she said. The biggest shot O’Neill took in her career was moving to the consumer bank after serving as chief operating officer of the private-banking division.

“I learned a tremendous amount, but that was probably the biggest risk — I went from managing 100 people to 12,000 people overnight and I was given the opportunity and I closed my eyes a little bit and jumped, and it was really the best move I made.”

(Reporting by Lananh Nguyen, Saeed Azhar and Nupur Anand; Editing by Nick Zieminski)


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