With the pandemic economic crisis fading, Bank of America said on Thursday (April 15) that it had released $2.7 billion of the cash it had socked away last year for possible losses. The move doubled its first-quarter profits — from $4.01 billion in 2020 to $8.05 billion, the company said in a press release.
Consumers’ increasing use of digital banking was a key driver of the bank’s growth. Active digital banking users hit 40.3 million, up 3 percent in the first quarter. The company added that digital sales were nearly half, 49 percent, of all “consumer banking sales.” This continued growth included an outsized 2.6 billion digital logins in the first quarter of 2021.
Users of the Zelle payments network, which the bank partly owns, grew to 13.5 million, now including small businesses. They sent and received 170 million transfers, up 66 percent from the previous year. In line with that, the value of the transactions was $49.5 billion, up 83 percent from the same period the previous year. Further demonstrating the rise of digital banking, clients booked about 786,000 digital appointments with an associate, which is a new record.
Overall, the bank said, total deposits rose $366 billion, or 25 percent, to $1.8 trillion. The release said the bank “returned $5 billion of capital to shareholders.”
Bank of America CEO Brian Moynihan commented on the big picture: “Progress in the health crisis and the economy point to an accelerating recovery.” He added that “the strength of our balance sheet, our complementary and diverse set of businesses, and our talented teammates position us to perform well in that environment.”
Regarding consumer banking, the release said that debit card spending was up 22 percent, while credit card spending was up slightly. Also regarding consumer banking, average deposits grew $187 billion, up by 25 percent. In contrast, “average loans fell $26 billion, or 8 percent, driven by lower card balances.”
Overall, digital banking has become so popular that 89 percent of American bank customers use mobile banking apps to manage their accounts.
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