Apparently millennials aren’t completely broke after all, or at least those who bank with Bank of America.
Touting Bank of America’s (BAC) efforts to improve its digital banking on an earnings call this week, CEO Brian Moynihan said customers ages 25-41 — a.k.a. millennials — hold nearly $200 billion in deposit investments at his bank. It’s the first time Bank of America has disclosed such a figure. Bank of America says in total it has 16 million millennial customers. The bank has 66 million customers total, according to its website.
Veteran bank analyst Mike Mayo notes millennials now comprise an impressive 40% of Bank of America’s sales.
“And so we are gaining share in that [millennial] class,” Moynihan told analysts. “It's because of the digital capabilities and all the things we talked about. Are they profitable? All our consumers basically are profitable. They represent the big part of our business today. The representation is currently outstanding.”
The growth among this young-ish population demo — mostly coming from more deposits in checking accounts — is important for Bank of America as banking increasingly shifts online. In effect, it shows millennials are choosing Bank of America over competitors — that’s critical as this class is poised to inherit large sums of money from their boomer parents.
Bank of America could leverage its success with millennials using its checking accounts and guiding them into profitable wealth advisory services from its Merrill Lynch arm as inheritances hit their bank accounts.
And it looks like that flywheel is already starting to spin.
“64% of our new clients are in the millennial categories for Merrill Edge and our preferred clients... So it's very good. We're driving it,” Moynihan said.