The news: Bank of America notched a record second quarter for revenues, per Bloomberg. Revenues totaled $26.61 billion, lower than analysts’ anticipated $26.72 billion.
Plunging into Bank of America’s card results:
- Combined credit and debit card spend was up 4% YoY to $244 billion.
- Average outstanding credit card balances were $100 billion, compared with $99 billion in Q2 2024.
- Lower card losses helped bring consumer net charge-offs down $60 million to $1.1 billion.
- 30-day delinquencies decreased to 2.34% from 2.43% a year ago.
CEO Brian Moynihan attributed the bank’s results in part to its enhanced Customized and Unlimited Cash Rewards credit cards as it tries to secure more of its superprime cardholder base’s loyalty and more spend.
Chasing stablecoin: Moynihan reiterated the bank’s interest in issuing stablecoins, noting that banks need to respond to the disruptive threat crypto presents to existing payment streams.
The banks’ actions have mirrored Moynihan’s rhetoric: BofA has issued a flurry of patents related to blockchain technology.
Drawing from the example of banks’ response to the introduction of Venmo, Moynihan envisioned a Zelle-like consortium-driven institutional stablecoin as well as bank-specific applications.
Our take: Bank of America’s tight underwriting standards—its average credit cardholder FICO score is 777—have created a strong stable of superprime cardholders to drive volume through tempting rewards offerings.
BofA’s strides into stablecoin technology and infrastructure demonstrate the bank’s commitment to protecting these wins. With the GENIUS bill headed to President Donald Trump’s desk, banks may feel emboldened to fast-track these crypto projects. But a role for bank-specific stablecoins may be narrow at best. Stablecoins like Fiserv’s FIUSD may be a better bet for broader consumer adoption.
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