Bank of America beats on earnings

Marco Green
October 13, 2017

Bank of America Corp, the second-largest USA bank by assets, reported a 15 percent rise in quarterly profit as the lender kept a tight leash on costs and benefited from higher interest rates. Earnings per share topped analysts' estimates.

The lender posted its highest net income in six years as the chief executive officer cut expenses more than forecast and net interest income rose to the highest since 2011. Average deposits grew 4 percent from past year, and average loan balances in business segments increased 6 percent. Earnings per share grew 17 percent to $0.48 from $0.41 a year ago. The bank's net interest income rose to $11.16 billion, though it started to pay slightly higher rates to depositors in the quarter.

Revenue, net of interest expense, increased 1 percent to $21.84 billion from $21.64 billion previous year.

In premarket trade, its shares were up 0.75% at US$25.64. The lender has spent $70 billion on legal bills since the financial crisis - more than any other US bank - including $30 billion on mortgage putbacks.

In the quarter, provision for credit losses decreased 2 percent to $834 million.

Revenue from trading stocks and bonds declined 15% from a year earlier to $3.15 billion - in line with the percentage drop the lender predicted last month. Net charge-offs increased 1 percent to $900 million, while the netcharge-off ratio declined to 0.39 percent from 0.40 percent.

Citigroup said net income rose 8 percent to $4.13 billion, or $1.42 a share.

Trading revenue at Bank of America, excluding an accounting adjustment, fell 15% to $3.15 billion from $3.73 billion in last year's third quarter.

Other reports by Click Lancashire

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