Bank of America Corp (NYSE:BAC) has reported first-quarter earnings that beat expectations as it benefited from higher interest rates and strong growth in its loan book.
However, like many of its peers, the bank has increased provisions for credit losses due to the deteriorating economic environment.
Revenue net of interest expense for the three months to March 31, 2023, came in 13% up at $26.3 billion, with net interest income rising 25% to $14.4 billion and non-interest income gaining 1% to $11.8 billion from the same quarter in 2022.
The bank said higher sales and trading revenue over the quarter were offset by lower service charges and a decline in the fees it earned for asset management and investment banking.
It increased its provision for credit losses by $901 million to $931 million.
Net income rose 15% to $8.2 billion, resulting in diluted earnings per share of $0.94, ahead of Wall Street estimates of $0.82, according to Refinitiv.
“Every business segment performed well as we grew client relationships and accounts organically and at a strong pace,” chair and CEO Brian Moynihan said in a statement. “Led by 13% year-over-year revenue growth, we delivered our seventh straight quarter of operating leverage. We further strengthened our balance sheet and maintained strong liquidity.”
The bank said its regulatory capital improved to $184 billion and its CET1 ratio remains nearly 100 basis points above its current minimum requirements.
"Asset quality remained strong with net charge-offs, while normalizing, still below pre-pandemic levels. We maintained strong liquidity, ending the quarter with $904 billion of Global Liquidity Sources,” chief financial officer Alastair Borthwick added. “Capital strength allowed us to return $4 billion back to shareholders, and we continued to invest in our people and businesses.”
Bank of America’s shares traded 2.9% up at $30.37 in pre-market trade.
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