Bank of America (NYSE: BAC) reported surging profits as its cost-cutting regimen continued to pay off.
News released Monday morning showed the second-biggest U.S. lender`s said profit increased 33% to $6.8 billion, exceeding the $5.92-billion estimate of analysts. Executives said it was the 14th-straight quarter the firm posted positive operating leverage, or increased profit by turning levers including costs.
The Charlotte, North Carolina-based bank said it managed to increase revenue while cutting expenses more than analysts had expected. The lender trimmed costs by 5% to $13.3 billion, beating the $13.5-billion forecast of analysts.
Meanwhile, revenue rose 3% to $22.6 billion, compared to the $22.3 billion estimate, excluding a year ago-gain tied to a business sale. The company's earnings per share surged 43% to 63 cents per share, beating the 57-cent-per-share estimate.
Still, of all the figures on the bank's income statement for the quarter, the starkest change was a 43% drop in the bank's income taxes to $1.7 billion from $3 billion. That looked to be the single biggest factor in the bank's profit increase in the quarter. The administration's tax cut took effect this year.
Moreover, the firm set aside $800 million for credit losses in the quarter, less than the $973.5 million expected by analysts. Non-performing loans fell half a billion dollars from the first quarter of 2018 on improvements in consumer and commercial debt.
Shares in BAC gained 39 cents, or 1.4%, to $28.94, within a 52-week trading range of $22.75 to $33.05.
Related Stories
