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Brian Moynihan, chief executive officer of Bank of America Corp,
the nation's second-largest bank, said customers spent 10% more
in August from a year earlier, and bank account balances are
higher for many than they were pre-pandemic.
"The consumer and businesses are in good shape," said William
Rogers, chief executive officer of Truist Financial Corp. "And
the commercial and corporate side, businesses have never been in
better health. Companies' balance sheets are all really strong."
The U.S. Federal Reserve has said it will continue to raise
rates as it tries to tame inflation, sparking fears the central
bank could cause a recession.
U.S. banks stand to benefit from rising interest rates because
they can earn more income from charging interest to customers.
Still, if rate hikes do send the economy into recession, that
could cut in to banks' profits.
Low unemployment, a strong housing market and a revival of the
entertainment industry in California reflect a solid economy
there, said Kelly Coffey, CEO of City National Bank, a
subsidiary of Royal Bank of Canada.
The combination of COVID-19 government stimulus and a strong job
market are still buoying consumer finances, said René Jones, CEO
of M&T Bank.
"When we look at our credit statistics," such as delinquencies
and charge-offs, they are "very much below where we were
pre-pandemic and it's going to take a long time to normalize
back to where we were."
(Reporting by Lananh Nguyen and Saeed Azhar in New York; Editing
by Michelle Price and Matthew Lewis)
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