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Bank Of America Q3 Profit Climbs, Tops Estimates

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Bank of America Corp. (BAC) reported Friday higher profit in its third quarter, benefited by higher net interest income and lower provision for credit losses. Earnings per share topped analysts' estimates. In pre-market activity, shares were gaining around 1.06 percent.

Brian Moynihan, Chief Executive Officer, said, "Revenue across our four lines of business grew 4 percent, even with a challenging comparable quarter for trading. We delivered positive operating leverage year over year for the 11th consecutive quarter while continuing to invest in improved capabilities. Digital activity with customers continues to shape the way we
provide products and services to customers...."

The company added that client activity remained strong across the franchise. Average deposits grew 4 percent from last year, and average loan balances in business segments increased 6 percent.

For the third quarter, net income applicable to shareholders climbed 15.1 percent to $5.12 billion from $4.45 billion last year. Earnings per share grew 17 percent to $0.48 from $0.41 a year ago.

On average, 25 analysts had expected the company to earn $0.45 per share, according figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Revenue, net of interest expense, increased 1 percent to $21.84 billion from $21.64 billion last year. Analysts expected revenues of $21.98 billion.

Net interest income increased 9 percent from last year to $11.2 billion, reflecting benefits from higher interest rates, as well as loan and deposit growth.

Meanwhile, noninterest income decreased 7 percent to $10.7 billion, mainly due to lower mortgage banking income and lower sales and trading revenue, partially offset by higher asset management fees.

In the quarter, provision for credit losses decreased 2 percent to $834 million. Net charge-offs increased 1 percent to $900 million, while the netcharge-off ratio declined to 0.39 percent from 0.40 percent.

Among divisions, Consumer Banking revenue rose 10 percent to $8.8 billion, and Global Wealth and Investment Management revenue grew 6 percent to $4.6 billion.

Global Banking revenue went up 5 percent, while Global Markets' sales and trading revenue declined mainly as Fixed Income, Currencies and commodities fell 22 percent.

by RTT Staff Writer

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