Bank of America (BAC) beat estimates for its first-quarter profit as strong growth in its consumer
lending business offset a decline in investment banking deals.
The second largest U.S. bank reported a 9% increase in its consumer banking revenue to $8.8
billion U.S. in the quarter ended March 31.
Net interest income increased by $1.4 billion U.S. compared to a year earlier supported by
strong loan and deposit growth, said Bank of America.
However, total investment banking fees fell 35% to $1.5 billion U.S. in the quarter as
dealmaking slowed around the world.
Big U.S. banks benefited from a deals boom last year after the Federal Reserve pumped
liquidity into capital markets to mitigate the economic impact of the pandemic.
This year, however, investment banking revenue has taken a hit as companies delay takeovers
and stock market listings amid a surge in stock market volatility.
Bank of America's global banking segment, which houses the investment banking business,
reported $165 million U.S. of provisions for credit losses, primarily because of reserves tied to
its exposure to Russia.
Profit tied to common shareholders fell nearly 13% to $6.6 billion U.S., or $0.80 U.S. per share
for the quarter ended March 31 from $7.56 billion U.S., or $0.86 U.S. per share a year earlier.
Analysts on average had expected a profit of $0.75 per share, according to data from Refinitiv.
Bank of America’s stock rose about 1% following its latest earnings release. Year to date, the
shares are down 19% at $37.57 U.S. each.
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