Bank of America beats estimates as higher rates boost revenue

Paterniano Del Favero
Luglio 18, 2017

Like its competitors, Bank of America benefited from rising interest rates.

Its two largest rivals - JPMorgan Chase & Co and Wells Fargo & Co - posted increases in the quarter. "All of our businesses delivered strong results, with several setting new records", said Chief Executive Officer Brian Moynihan said.

Interest income was hurt by the sale of a United Kingdom credit-card business and stagnating long-term interest rates. It lowered guidance for the second quarter to a jump of US$150 million, even as the United States central bank raised rates again in March.

Bank of America Corp, the second-largest USA lender by assets, reported a higher-than-expected quarterly profit on Tuesday as revenue rose in three of its main businesses, more than offsetting a fall in trading.

Two months ago, Mr Moynihan told investors the increase in interest income would more likely be about US$50 million, because the bank sold the United Kingdom unit more quickly than expected and yields have been stubbornly low on long-dated Treasury bonds.

Profit of 46 cents a share in the three months through June compared with the 43-cent average of estimates from analysts surveyed by FactSet. Bank of America's net interest income increased 9 percent in the quarter compared to a year ago to $10.99 billion.

Total revenue climbed 7 per cent to US$22.8 billion from a year earlier, exceeding analysts' expectations of US$21.8 billion.

Net income rose 11 percent to $4.91 billion.

Non-interest expenses rose 1.7 percent to $13.73 billion.

The Charlotte, N.C. -based lender's shares, up 8.4 percent year to date, were down 1 percent in premarket trading on Tuesday.

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