The first-quarter results released: On Tuesday, Bank of America (BAC) reported first-quarter results that surpassed analysts' predictions for both profit and revenue, driven by robust net interest income and trading performance.
According to the company's report:
- Earnings: 90 cents a share vs. 82 cents per share LSEG estimate
- Revenue: $27.51 billion vs. $26.99 billion expected
The bank said profit climbed 11% to $7.4 billion, or 90 cents a share, as revenue rose 5.9% to $27.51 billion.
The increase was driven by net interest income, the gap between what banks pay their depositors and what they earn from loans and investments. This income reached $14.6 billion for the quarter, surpassing the StreetAccount estimate of $14.56 billion.
Bank of America indicated that its net interest income improved as a result of lower deposit expenses and higher yields on investments when compared to the prior year.
"Our business clients have been performing well; and consumers have shown resilience, continuing to spend and maintaining healthy credit quality," CEO Brian Moynihan said in a release.
The bank reported a 17% increase in equities trading revenue, reaching $2.2 billion, which marginally exceeded the estimated $2.12 billion. Additionally, fixed income revenue grew by 5% to $3.5 billion, surpassing the estimate of $3.46 billion.
Investment banking fees slipped 3% to $1.5 billion, missing the $1.6 billion estimate, amid the industrywide slowdown caused by trade uncertainty.
The company's allocation for loan losses, a crucial indicator monitored by investors as banks prepare for a potential recession later this year, was reported at $1.5 billion, surpassing the anticipated $1.58 billion.
In recent weeks, Bank of America stock has faced a downturn amid concerns that the tariff policies implemented by President Donald Trump could trigger a recession. The company's stock has fallen more than 16% this year through Monday.