Bank of America (BAC, Financial) has reported a strong performance for the third quarter, with notable improvement in key financial metrics. Despite a slight decline in net interest income compared to the previous year, it exceeded market expectations, suggesting a potential upward trend in the coming months. In July, the bank had anticipated a rebound in net interest income for the latter half of the year.
The bank's investment banking and trading divisions demonstrated robust results, contributing to higher-than-expected profits and revenues. Total revenue for the quarter reached $25.49 billion, slightly above the forecasted $25.3 billion. Earnings per share stood at $0.81, surpassing analysts' expectations of $0.77.
Net interest income saw a year-over-year decline of 2.9%, falling to $14.1 billion. However, this figure still marginally exceeded the anticipated $14.06 billion. According to Wells Fargo analyst Mike Mayo, Bank of America appears to be at a turning point for net interest income, although the extent of future gains will depend on interest rate movements.
Revenue from equities, fixed income, foreign exchange, and commodities trading grew by 12% to $4.93 billion, offsetting the decline in net interest income. The investment banking sector showed significant resilience with an 18% increase in revenue, reaching $1.4 billion. This growth exceeded analysts' expectations, fueled by a rise in bond and stock issuances as confidence in interest rate cuts improved.
Following the earnings report, Bank of America's stock price rose by 3% in pre-market trading. Year-to-date, the stock has gained nearly 24% as of Monday.
