Brian Moynihan, chief executive of Bank of America Corp, the nation’s second-largest bank, said customers spent 10% more in August than a year earlier, and bank account balances are higher for a lot than they were before the pandemic.
“Consumer and business are in good shape,” said William Rogers, chief executive of Truist Financial Corp. “And on the business and corporate side, companies have never been healthier. Corporate balance sheets are all really strong.”
The US Federal Reserve has said it will continue raising rates as it tries to keep inflation under control, sparking fears the central bank could trigger a recession.
US banks have every interest in taking advantage of rising interest rates because they can earn more revenue by charging interest to their customers. However, if rate hikes send the economy into recession, it could reduce bank profits.
Low unemployment, a strong real estate market and a reviving entertainment industry in California reflect a strong economy in that region, said Kelly Coffey, CEO of City National Bank, a subsidiary of Royal Bank of Canada. .
The combination of government COVID-19 stimulus measures and a strong job market continues to support consumer finances, said Ren Jones, CEO of M&T Bank.
“When we look at our credit statistics,” such as delinquencies and delinquencies, they are “much lower than we were before the pandemic and it will take a long time to get back to normal.”