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Beer, Credit Card Debt And Other Positives For Bank Of America

The past week or so has been a very exciting one for the world's ninth largest bank. On November 9 we learned that consumer credit grew by an unprecedented amount in September. According to data from the Federal Reserve, non-mortgage consumer borrowing rose by $28.9 billion month-over-month, the largest dollar gain since 1941, when records first begin. $22.2 billion of that $28.9 billion came in the form of non-revolving debt, primarily in the form of student and auto loans. The other $6.7 billion in gains came in the form of revolving debt (credit cards), which represents 4.7% year-over-year growth, the highest growth rate achieved since August 2008.

Two days later, on November 11, Anheuser Busch InBev (NYSE: BUD) announced it has secured a commercial loan to purchase SABMiller (OTCPK:SBMRY) in a monumental deal valued at just under $108 billion. The $75 billion loan that Busch will be taking out to finance its purchase comes in as the largest commercial loan on record. Among the lead lenders are Bank of America (NYSE: BAC), Deutsche Bank (NYSE: DB), Barclays (NYSE: BCS), Banco Santander (NYSE: SAN), BNP Paribas (OTCQX:BNPQY) and Bank of Toyko-Mitsubishi UFJ.

So What?

Collectively these two pieces of information speak volumes to the rapidly improving state of affairs for Bank of America, and more broadly the entire banking industry. Revolving credit debt growth had from 2012 to 2014 flat lined around 1%. In late 2014 and into 2015 the growth rate extended up towards the 3% range, and...