Bank of America (NYSE:BAC) beat earnings expectations to cap off a rollercoaster first-quarter results for US banks.
Net income was 12% below that of the comparative period last year at US$7.1bn, but the bank still outperformed rivals including JP Morgan, which slumped 42%.
An upturn in lending activity, which had sunk over the previous two years on pandemic-related issues, enabled it to top analysts’ estimates.
Earnings were US$0.80 per share, against experts’ forecasts of US$0.75, according to a FactSet survey, while revenue was just ahead of expectations at US$23.2bn.
“Our strong first-quarter client activity drove results that allow us to deliver for shareholders while continuing to invest in our people, businesses, and communities,” Brian Moynihan, chairman and chief executive said.
Average loan and lease balances rose 8% to US$978bn, commercial lending leapt 16% and net interest income grew 13% on loan and deposit growth.
Although trading revenue sunk 15% as minor equity gains weren’t enough to compensate for weakened fixed-income trading.
Leading lenders are experiencing turbulent times as soaring inflation, the Federal Reserve’s intention to consecutively raise interest rates and Russia’s continued invasion of Ukraine is still knocking consumer confidence and borrowing.
Bank of America (NYSE:BAC) said a one percentage point hike in short and long-term interest rates would likely see its net interest income surge by US$5.4bn in the coming year.
Shares climbed 2.0% to US$39.65 under an hour into open on Tuesday.