Bank of America registers double-digit revenue growth
US lender boosted by jumps in interest income and fees
Bank of America reported double-digit revenue growth on Thursday as big jumps in interest income and fees helped it to outperform megabank peers.
Though the largest US lenders have been able to report higher profits this year due to lower credit costs and strength in fee businesses like trading and investment banking, nearly all of them have struggled to increase the revenue they make from core lending due to rock bottom interest rates and a slowdown in borrowing.
Bank of America, the second-largest US lender, however, reported revenue jumped 12 per cent to $22.8bn.
It was able to increase net interest income by 10 per cent during the quarter despite a 3 per cent drop in average loan balances, as it was more aggressive than peers in redeploying excess liquidity into investments.
Wells Fargo, which also released quarterly earnings on Thursday, reported a 2 per cent drop in revenue. JPMorgan Chase’s revenue inched up 1 per cent.
Overall the Charlotte-based lender reported earnings of $7.7bn, or 85 cents per share, compared to earnings of $4.9bn, or 51 cents per share, a year earlier.
Profits were boosted by the bank; ’s release of $1.1bn in loan loss reserves of — due to an improving economic outlook meaning fewer defaults — and a strong performance by its equity trading division.
Analysts polled by FactSet had forecast earnings of 71 cents per share on revenue of $21.7bn.