U.S. bank CEOs say consumers and businesses are still in good shape

By Lananh Nguyen and Saeed Azhar

NEW YORK (Reuters) – U.S. shoppers and companies are nonetheless in good monetary form regardless of excessive inflation and considerations a few looming recession, a few of the nation’s high bankers informed a convention in New York on Tuesday.

Brian Moynihan, chief govt officer of Financial institution of America Corp, the nation’s second-largest financial institution, mentioned prospects spent 10% extra in August from a yr earlier, and checking account balances are greater for a lot of than they have been pre-pandemic.

“The patron and companies are in fine condition,” mentioned William Rogers, chief govt officer of Truist Monetary Corp. “And the industrial and company facet, companies have by no means been in higher well being. Firms’ steadiness sheets are all actually robust.”

The U.S. Federal Reserve has mentioned it would proceed to lift charges because it tries to tame inflation, sparking fears the central financial institution may trigger a recession.

U.S. banks stand to profit from rising rates of interest as a result of they will earn extra revenue from charging curiosity to prospects. Nonetheless, if fee hikes do ship the economic system into recession, that would lower in to banks’ income.

Low unemployment, a powerful housing market and a revival of the leisure trade in California mirror a stable economic system there, mentioned Kelly Coffey, CEO of Metropolis Nationwide Financial institution, a subsidiary of Royal Financial institution of Canada.

The mix of COVID-19 authorities stimulus and a powerful job market are nonetheless buoying client funds, mentioned René Jones, CEO of M&T Financial institution.

“Once we take a look at our credit score statistics,” corresponding to delinquencies and charge-offs, they’re “very a lot under the place we have been pre-pandemic and it’ll take a very long time to normalize again to the place we have been.”

(Reporting by Lananh Nguyen and Saeed Azhar in New York; Enhancing by Michelle Value and Matthew Lewis)