Bank of Americathe country’s second-largest lender, posted top and bottom results in the first quarter, supported by stock sales and trading.
Here’s what the company reported:
- Earnings per share: $1.11 per share versus $1.01 LSEG estimate
- Income: $30.43 billion versus estimate of $29.93 billion
The bank reported Wednesday that its net income rose 17% to $8.6 billion, or $1.11 per share, Bank of America’s highest EPS in nearly two decades.
Revenue climbed 7.2% to $30.43 billion on higher net interest income, higher trading revenue and investment banking and asset management fees.
Equity trading contributed to performance, while the geopolitical environment disrupted stock markets. Revenue from that business jumped 30% to $2.83 billion, beating StreetAccount’s estimate by about $350 million and helping propel the bank’s business operations to their best quarter in 15 years.
The investment bank also beat estimates and rose 21% to $1.8 billion, compared to the StreetAccount consensus of $1.73 billion.
Net interest income, the measure of profitability of lending, rose 9% to $15.9 billion and also beat expectations of $15.67 billion, according to StreetAccount. This was due to increased loan and deposit balances, repricing of fixed rate assets and market activity.
Bank of America previously forecast net interest income growth of between 5% and 7% this year, but raised that forecast Wednesday to between 6% and 8% due to outperformance in the first quarter.
In a sign that the situation for the bank’s borrowers is not worsening, the company recorded a $1.3 billion provision for credit losses in the quarter, lower than the year-earlier provision of $1.5 billion and about $190 million less than the estimate.
“Right now the company is doing well. Consumers are spending, credit quality is very good and improving, and you’re seeing business customers using their lines a little bit more,” Bank of America CEO Brian Moynihan told CNBC on Wednesday. “We’re all facing the same uncertainty, but right now, American businesses and consumers are doing well and, frankly, our global businesses are doing pretty well.”
However, like its rival Goldman Sachs, the bank’s bond revenues fell short of expectations. That company generated about $3.5 billion in revenue, missing StreetAccount’s estimate by about $330 million.
The net charge-off rate, indicating the proportion of total loans deemed uncollectible, improved by 6 basis points during the quarter to 0.48%. The company’s consumer banking and global wealth management divisions each earned more than 20% of their net income.
Return on tangible equity, a measure of profitability, was 16%, an improvement of more than 200 basis points.
— CNBC’s Hugh Son and Laya Neelakandan contributed to this report.
Correction: Bank of America previously forecast net interest income growth of between 5% and 7% this year. A previous version of this article incorrectly stated the beach. And the company’s consumer banking and global wealth management divisions each gained more than 20% in net profit. A previous version incorrectly stated the growth measure.