Earnings Roundup Finds Resilient Consumer Spend and Solid Credit

Core Viewpoint - The financial services companies reported positive results despite economic uncertainties, highlighting customer resilience and strong balance sheets [1][12]. Group 1: Deposit Growth and Credit Quality - Deposit bases expanded or remained stable in a competitive rate environment, with KeyCorp showing mid-single-digit growth year over year and Truist increasing balances while reducing deposit costs by 10 basis points [2] - Credit quality remained robust, with KeyCorp's nonperforming assets decreasing nearly 10% from the prior quarter and Truist's provision for credit losses declining sequentially [3] Group 2: Consumer Spending Trends - American Express reported a 6% year-over-year increase in card member spending, with significant growth among Gen Z and millennials, indicating a focus on experiences [4] - Truist's mobile app saw a 31% increase in consumer loans, with Gen Z volumes rising by 47%, reflecting strong demand among younger consumers [5] Group 3: Investment and Capital Plans - Management teams are pursuing capital plans despite macroeconomic uncertainties, with Truist launching real-time payments and achieving double-digit growth in treasury-management revenue [7] - KeyCorp is actively reviewing clients for tariff exposure while maintaining existing capital expenditure projects, and Fifth Third is investing in Southeast branches and national loan-origination platforms [8] Group 4: Contingency Planning - Each institution has contingency plans in place, with KeyCorp setting aside an additional $8 million in loan-loss reserves and Truist trimming certain expenses while continuing to invest in risk management and digital initiatives [9][10] - The common strategy includes maintaining liquidity, tight credit underwriting, and targeted technology investments to either cut costs or expand fee income [10] Group 5: Market Confidence and Preparedness - Confidence among these institutions is bolstered by low unemployment and stable delinquency metrics, alongside a shift towards higher-quality borrowers and fee-based products [11] - American Express noted that 70% of new accounts carry annual fees, while KeyCorp and Truist emphasized the growth of wealth management and treasury businesses [12] Group 6: Overall Sentiment - Despite acknowledging geopolitical and policy risks, the companies expressed optimism about their preparedness and ability to navigate economic uncertainties [12][13]