NEW YORK, April 18 — Bank of America Corp beat estimates for first-quarter profit today, as strong growth in its consumer lending business helped offset a hit from a slowdown in global deal-making.
The bank reported a 9 per cent rise in consumer banking revenue to US$8.8 billion (RM37 billion) in the quarter ended March.
“First-quarter results were strong despite challenging markets and volatility,” Chief Financial Officer Alastair Borthwick said in a statement.
“Net interest income increased by US$1.4 billion versus the year-ago quarter supported by strong loan and deposit growth. Going forward, and with the forward curve expectation of rising interest rates, we anticipate realising more of the benefit of our deposit franchise.”
However, total investment banking fees plunged 35 per cent to US$1.5 billion in the quarter.
Big US banks benefited from a deal-making boom last year after the Federal Reserve pumped liquidity into capital markets to mitigate the economic impact of the Covid-19 pandemic.
This year, however, investment banking revenue have taken a hit as companies delayed takeovers and stock market listings amid a surge in volatility in equity markets.
Bank of America’s global banking segment, which houses the investment banking business, reported US$165 million of provisions for credit losses, primarily because it built reserves tied to its exposure to Russia and a growth in loans.
The second-largest US bank by assets released US$362 million from its reserves it had set aside for bad loans.
Profit applicable to common shareholders fell nearly 13 per cent to US$6.6 billion, or 80 cents per share, for the quarter ended March 31 from US$7.56 billion, or 86 cents per share, a year earlier.
Analysts on average had expected a profit of 75 cents per share, according to the IBES estimate from Refinitiv.
Shares of the bank were up 1 per cent in premarket trading. — Reuters
