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File image of a person walking past a Bank of America logo in New York, USA.
April 18 (Archyde.com) – Bank of America Corp beat first-quarter earnings estimates on Monday as strong growth in its consumer lending business helped offset the impact of a slowdown in global trading.
The entity reported a 9% increase in revenue from consumer banking, to 8.8 billion dollars in the quarter that ended in 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 $1.4 billion compared to the prior year quarter on the back of strong growth in loans and deposits. Going forward, and with the expectation of the future curve of rising interest rates, we anticipate reaping more of the benefits of our deposit franchise,” he added.
Total investment banking fees, however, plunged 35% to $1.5 billion in the quarter.
Large US banks benefited from a trading boom last year after the Federal Reserve injected liquidity into capital markets to mitigate the economic impact of the COVID-19 pandemic.
This year, however, investment banking revenue has taken a hit as companies delayed acquisitions and IPOs amid increased volatility in equity markets.
Bank of America’s global banking segment, which houses the investment banking business, reported $165 million in loan-loss provisions, largely as it built up reserves linked to its exposure to Russia and growth in loans.
The second-largest US bank by assets released $362 million of reserves it had set aside for bad loans.
Earnings applicable to common shareholders fell nearly 13% to $6.6 billion, or 80 cents a share, in the quarter ended March 31, from $7.56 billion, or 86 cents a share, a year earlier.
Analysts on average had expected a profit of 75 cents a share, according to Refinitiv’s IBES estimate.
The bank’s shares were up 1% in pre-market trading.
(Reporting by Mehnaz Yasmin in Bangalore; edited in Spanish by Carlos Serrano)