Bank of America exceeded analysts’ expectations for third-quarter profit and revenue, largely due to stronger-than-anticipated trading performance.
The bank reported earnings of 81 cents per share, surpassing market expectations of 77 cents per share.
Revenue also edged higher to $25.35 billion, compared to $25.25 billion expected.
Despite the positive trading results, net income fell by 12% from a year earlier, amounting to $6.9 billion.
This decline was driven by higher provisions for loan losses and increasing expenses.
However, gains in trading revenue, asset management, and investment banking fees helped offset a slight decline in net interest income (NII), which fell 2.9% to $14.1 billion. This figure still exceeded the $14.06 billion forecast.
CEO Brian Moynihan, who has led Bank of America since 2010, said, “We reported solid earnings results, delivering higher average loans and our fifth consecutive quarter of sequential average deposit growth. Net interest income increased over the second quarter, complimented by double-digit, year-over-year growth in investment banking and asset management fees, as well as sales and trading revenue.”
Fixed-income trading revenue rose by 8%, reaching $2.9 billion and surpassing the $2.74 billion estimate. Equities trading performed even better, jumping 18% to $2 billion, outpacing the $1.81 billion projection.
Similarly, investment banking fees surged by 18% to $1.40 billion, topping estimates of $1.27 billion.
The bank set aside $1.5 billion in provisions for credit losses, slightly under the forecasted $1.57 billion, showing prudence in managing potential future risks.
Bank of America joins other major U.S. banks in reporting better-than-expected results, following JPMorgan Chase and Wells Fargo, which both posted strong earnings last Friday.
Goldman Sachs and Citigroup also revealed their third-quarter figures on Tuesday, while Morgan Stanley is scheduled to report on Wednesday.