Bank of America reported on Wednesday its third-quarter results, which are above the expectations of the analysts in the case of higher-than-anticipated investment banking revenue.
The company has announced earnings per share are $1.06 vs. 95 cents expected, and revenue remains $28.24 billion vs. $27.5 billion expected, according to LSEG.
America’s second-largest bank in terms of assets reported an increase in profits by 23 percent in comparison to the previous year to $8.5 billion, or 1.06 per share. Meanwhile, the revenue grew by 10.8 percent to $28.24 billion.
The bank shares increased 4 percent on Wednesday. In the current year, they have already increased by nearly 19 percent.
Similar to its counterparts, Bank of America’s Wall Street businesses contributed to the performance of the quarter.
JPMorgan Chase and Goldman Sachs were among banks that were reporting good returns on trading and investment banking earnings in the third quarter due to increased activity by institutional investors as well as corporations seeking to acquire companies or to raise capital.
Bank of America reported that its fees in investment banking increased 43 percent in one year, since it was the year before, to accrue to 2 billion dollars; nearly $380 million higher than what analysts surveyed by StreetAccount had anticipated.
The quarterly beat was also driven by equities trading; revenue in equities trading also grew 14 percent to reach $2.3 billion, about $200 million higher than the StreetAccount forecast.
The trading in fixed income improved by 5 percent to $3.1 billion, as expected.
Bank of America also had an enhanced perspective regarding credit losses in the quarter. The company announced its credit loss provision was reduced by approximately 13 per cent to $1.3 billion, less than the $1.58 billion estimate of StreetAccount.
The net interest income increased by 9 percent to $15.39 billion, which is approximately $150 million greater than the Street account estimate.
In the earnings release, CEO of Bank of America, Brian Moynihan, said, “With continued organic growth, every line of business reported top and bottom-line improvements. Strong loan and deposit growth, coupled with effective balance sheet positioning, resulted in record net interest income.”
