Prime Highlights:
- Bank of America’s profit rose 23% to $8.5 billion, surpassing analyst expectations.
- Investment banking fees surged 43% from last year, driving strong quarterly performance.
Key Facts:
- Revenue for the third quarter reached $28.24 billion, exceeding the expected $27.5 billion.
- Provision for credit losses fell 13% to $1.3 billion, reflecting improved financial health.
Key Background:
Bank of America reported stronger-than-expected third-quarter results on Wednesday, driven by robust growth in investment banking and trading revenues, surpassing analysts’ forecasts.
The second-largest U.S. bank by assets posted a 23% rise in profit, totaling $8.5 billion, or $1.06 per share, compared to the same period last year. Revenue climbed 10.8% to $28.24 billion, beating the $27.5 billion estimate anticipated by analysts.
Bank of America’s shares responded positively to the earnings report, rising almost 5% in premarket trading. The stock has gained approximately 14% year-to-date.
The bank’s Wall Street operations played a crucial role in the quarterly performance. Investment banking fees jumped 43% from last year to $2 billion, beating expectations by around $380 million. Equities trading also helped, rising 14% to $2.3 billion, about $200 million higher than analysts expected. Fixed income trading stayed steady at $3.1 billion, meeting forecasts.
Bank of America also saw improvements in credit losses. Its provision for credit losses dropped 13% to $1.3 billion, below the expected $1.58 billion, showing stronger financial health. Net interest income increased 9% to $15.39 billion, surpassing analyst expectations by around $150 million.
“With continued organic growth, every line of business reported top and bottom-line improvements,” said CEO Brian Moynihan. “Strong loan and deposit growth, coupled with effective balance sheet positioning, resulted in record net interest income.”
The bank’s results align with broader trends across Wall Street, as peers such as JPMorgan Chase and Goldman Sachs also reported gains in trading and investment banking revenues amid heightened activity from institutional investors and corporations seeking acquisitions or capital raising.
These robust quarterly results reinforce Bank of America’s strong position in the financial sector, highlighting the resilience of its core businesses and the continued strength of the U.S. investment banking market.
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