|
The
second-biggest U.S. bank benefited from 3 percent growth in
consumer loans and 4 percent growth in loans to businesses in
the first quarter, allowing it to capture more revenue from
higher U.S. interest rates. Revenue rose in two of the lender's
four main businesses.
The bank has benefited from the central bank's four rate hikes
in 2018, while a strong job market has also kept bad loans in
check and borrowing healthy. BofA relies heavily on higher
interest rates to maximize profits as it has a large deposit
pool and rate-sensitive mortgage securities.
Net interest income - the difference between what a lender earns
on loans and pays on deposits - rose 5 percent to $12.38
billion. Average deposits also rose nearly 5 percent to $1.36
trillion.
However, BofA's trading desks, like its peers, have had a slow
start to the year due to the U.S. government shutdown and a drop
in volatility, compared with a year earlier when changes in the
U.S. tax code and trade war concerns spurred more trading.
Overall trading revenue declined 17 percent, with equities
trading revenue falling 22 percent and fixed income trading
revenue slipping 8 percent.
" It was a challenging capital markets environment," Chief
Executive Officer Brian Moynihan said in a statement.
Net income applicable to common shareholders rose 6 percent to
$6.87 billion.
Excluding one-time items, the bank earned 71 cents per share,
beating the 66 cents per share analysts on average had expected,
according to IBES data from Refinitiv.
Revenue, net of interest expense, was flat at $23 billion and
was below analysts' expectations of $23.30 billion.
Non-interest expense fell 4.5 percent to $13.2 billion.
(Reporting by Siddharth Cavale in Bengaluru; Editing by Anil
D'Silva)
[© 2019 Thomson Reuters. All rights
reserved.] Copyright 2019 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
