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Bank of America delivers earnings beat after best opening quarter for trading arm

Published 2024-04-16, 07:05 a/m
© Reuters Bank of America delivers earnings beat after best opening quarter for trading arm

Proactive Investors - Bank of America Corp (NYSE:BAC) shares fell in pre-market trading even though first-quarter earnings fell less than expected.

The lender reported an 18% fall in net income to $6.7 billion for the first three months of 2024, on revenue down 2% to $25.8 billion.

Adjusted net income, taking into account the Federal Deposit Insurance Corp’s special assessment, filtered through to adjusted earnings per share of $0.83, which was better than the $0.77 that Wall Street forecast.

Chair and CEO Brian Moynihan said it was a “strong quarter”, with a 21st consecutive quarter of net checking account growth.

He hailed a rebound in investment banking and record revenue from wealth management team.

“Bank of America’s sales and trading businesses continued their strong 2023 momentum this quarter, reporting the best first quarter in over a decade,” he noted.

Revenue was down as higher investment banking and asset management fees, as well as higher than expected sales and trading revenue, failed to offset a 3% fall in net interest income, which was attributed to higher deposit costs more than offsetting higher asset yields and modest loan growth.

A $1.3 billion quarterly provision for credit losses was made, up from $1.1 billion in the final quarter of last year and $931 million in Q1 last year.

At the end of the quarter deposit balances stood at $1.95 trillion up $23 billion since the end of December.

The common equity tier 1 (CET1) capital ratio was unchanged at 11.8%, 184 basis points above the regulatory minimum, after the bank returned $4.4 billion to shareholders through dividends and share buybacks.

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