Bank of America profit beats estimates on cost cuts, loan growth
(Reuters) - Bank of America Corp (BAC.N) reported a better-than-expected rise in quarterly profit on Monday as the second-largest U.S. lender reined in costs, while higher interest rates and loan growth helped offset lower bond trading revenue.
Like its peers, the bank has benefited from U.S. President Donald Trump’s tax cuts and a rise in interest rates. A strong job market has also kept bad loans in check and borrowing healthy.
BofA relies heavily on higher interest rates to maximize profits as it has a large deposit pool and rate-sensitive mortgage securities.
Total interest income - the difference between what a lender earns on loans and pays on deposits - rose 6.4 percent to $11.87 billion. Total deposits rose nearly 5 percent to $1.35 trillion.
“Responsible growth, backed by a solid U.S. economy and a healthy U.S. consumer, combined to deliver the highest quarterly pre-tax earnings in our company’s history,” Chief Executive Officer Brian Moynihan said in a statement.
Shares of Bank of America rose 0.6 percent in early trading on Monday.
Net income applicable to common shareholders rose 35 percent to $6.7 billion in the third quarter ended Sept. 30.
Excluding items, the bank earned 67 cents per share, beating the average analyst estimate of 62 cents per share, according to I/B/E/S data from Refinitiv.
Non-interest expense fell 2.4 percent to $13.07 billion.
Reporting by Siddharth Cavale in Bengaluru; Editing by Anil D'Silva
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |