Bank of America profit rises as it cashes in on higher interest rates

Bank of America profit rises as it cashes in on higher interest rates



Bank of America Corp’s profit rose in the primary quarter as it earned extra from clients’ interest funds whereas the Federal Reserve raised borrowing prices.

Rival banking giants JPMorgan Chase and Co and Citigroup Inc additionally reaped windfalls from higher interest funds in the primary quarter, whereas setting apart billions of {dollars} to organize for a worsening economic system.

“Results were strong despite a challenging economic environment with market and banking sector volatility,” Bank of America Chief Monetary Officer Alastair Borthwick stated on Tuesday.

The corporate’s shares have been up 3% in premarket buying and selling following the outcomes.

The collapse of two U.S. lenders in March shook the trade and exacerbated considerations a couple of looming recession. The disaster battered financial institution shares and prompted spooked depositors to maneuver their money to bigger establishments.

Deposits at BofA fell 2% to $1.05 trillion in the primary quarter, in contrast with the fourth quarter.

The corporate’s funding banking charges fell 20% to $1.2 billion.

Merchants in fastened revenue, currencies and commodities stayed in excessive demand, bringing in $3.5 billion in income for BofA, up 27% from a yr earlier.

Bank of America’s internet interest revenue, which displays how a lot cash the financial institution makes from charging interest to clients, rose 25% to $14.four billion in the quarter.

The banking trade was rocked by the failures of two U.S. lenders in March. The collapses battered financial institution shares and prompted spooked depositors to maneuver their money to bigger establishments.

The corporate’s internet revenue relevant to frequent shareholders rose to $7.66 billion, or 94 cents per share, for the three months ended March 31, the second-largest U.S. lender reported on Tuesday. That compares with $6.6 billion, or 80 cents per share, a yr earlier. (Reporting by Manya Saini and Niket Nishant in Bengaluru and Saeed Azhar in New York; Extra reporting by Siddarth S; Enhancing by Lananh Nguyen and Shounak Dasgupta)