Brian Moynihan, CEO of Bank of America
Heidi Gutmann | CNBC
bank of america Third-quarter profits and sales exceeded analysts’ expectations, following better-than-expected trading results.
Here’s what the company reported:
- Revenue: LSEG estimate of 81 cents vs. 77 cents.
- Revenue: $25.49 billion vs. estimated $25.3 billion
The bank said Tuesday that net income fell 12% from a year earlier to $6.9 billion, or 81 cents a share, due to higher loan loss provisions and higher expenses.
Revenue increased less than 1% to $25.49 billion, as higher trading income, asset management fees and investment banking fees offset lower net interest income.
The bank’s shares rose 2.5% in premarket trading.
Bank of America, run by CEO Brian Moynihan since 2010, has demonstrated the benefits of having a large, diverse financial institution. Analysts are focusing on the bank’s core business of accepting deposits and making loans to consumers and businesses, as rising interest rates weigh on the bank’s earnings from interest income.
But the quarter showed that the bank, like its rivals, benefited from increased activity on Wall Street through its trading and advisory businesses. JP Morgan Chase and goldman sachs did.
Fixed income trading revenue rose 8% to $2.9 billion on strong currencies and interest rate trends, beating Street Account expectations of $2.74 billion. Equity trading rose 18% to $2.0 billion on higher cash and derivatives volumes, beating Street accounts’ expectations of $1.81 billion.
Investment banking fees also rose 18% to $1.4 billion, beating Street accounts’ expectations of $1.27 billion.
Net interest income fell 2.9% year-over-year to $14.1 billion, but was slightly higher than Street estimates of $14.06 billion.
The NII numbers for the third quarter were higher than the second quarter, indicating an improving trajectory for this important indicator. The lender announced in July that net interest income would recover in the second half of this year.
Wells Fargo analyst Mike Mayo said in a note Tuesday that Bank of America “appears to be turning the corner toward leveraging NII,” but the degree to which it does so depends on future interest rates. Ta.
NII is one of the key ways banks earn revenue: it is the difference between the amount they earn from loans and investments and the amount they pay depositors for their savings.
The bank’s allowance for credit losses for the quarter was $1.5 billion, slightly below expectations of $1.57 billion.
JP Morgan Chase Wells Fargo & Co. posted better-than-expected profits Friday, helped by its investment banking business. goldman sachs and citygroup We reported the results on Tuesday as well. morgan stanley It plans to disclose earnings on Wednesday.
This story is developing. Please check back for the latest information.
