Bank of America profit rises 15% on lower costs

Cornelia Mascio
Ottobre 13, 2017

Bank of America Corp, the second-largest US bank by assets, reported a 15 percent rise in quarterly profit as the lender kept a tight leash on costs and benefited from higher interest rates.

Third-quarter profit climbed 13% to $5.59 billion, or 48 cents a share, from $4.95 billion, or 41 cents, a year earlier, the bank said Friday in a news release.

Earnings per share was up 48 U.S. cents from 41 USA cents, ahead of market expectations for 45 United States cents a share.

Wealth management revenues increased 6% to $4.6 billion.

Total revenue grew by 1% to US$22.08bn from US$21.86nm, a year earlier, again beating Wall Street's expectations for US$21.98bn.

Bank of America's quarterly return on equity was 8.1%, up from the prior quarter, but below the bank's 10% theoretical cost of capital.

Bank of America posted $11.4 billion in net interest income, using the adjusted figure analysts tend to prefer to show fully taxable equivalence.

BofA's large stock of deposits and rate-sensitive mortgage securities make the lender particularly dependent on a rise in interest rates to boost profits.

The Charlotte, N.C. -based lender faced some headwinds in the third quarter. The lender, together with other bankers, had warned that trading revenue would come under pressure. And while long-term interest-rates have risen recently, they were low for much of the quarter. Global markets business revenue fell due to weak trading that is hurting the entire sector. Expenses declined 2.5% to $13.1 billion, compared with estimates of $13.3 billion. The lender is working to reduce annual expenses to $53 billion in 2018 to boost profits.

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