Bank of America’s account holders saw strong growth in their balances during Covid and have yet to spend down their pandemic-era stimulus money, CEO Brian Moynihan told CNBC.
In an interview on “Squawk Box” from The World Economic Forum in Davos, Switzerland, BofA’s chairman said customers who had between $1,000 to $2,000 before the pandemic, now have about $4,000 as of last month. If they had an average balance of $2,000 to $5,000 pre-Covid, they now have around $13,000 as of April, he added.
Bank balances have grown monthly since last July, Moynihan said, predicting that people “probably” won’t start spending down their stimulus check-boosted accounts right now.
The government provided Covid relief funds throughout 2020 and 2021 to help blunt the economic effects of the pandemic including unemployment, shuttered businesses and more. But most of those programs have since been rolled back.
At the same time, soaring inflation and its decimating effect on the stock market has raised questions about whether Americans’ savings accumulated during the height of the pandemic are still intact, and if they’re still spending healthily.
Moynihan previously said in an interview on “Mad Money” in April that consumers spent 13% more this past March than they did the same month last year.
Yet, this increased spending doesn’t seem to have made a dent in consumers’ balances.
“In the balances of our customers, they have more money. In April, their balances grew over March, and in March they grew over all the way back to mid-last year,” Moynihan said Monday from Davos.