BofA profit rises on higher rates, lower costs
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(Reuters) – Bank of America Corp (BAC.N), the second-largest U.S. bank by assets, reported a 15 percent rise in quarterly profit as the lender kept a tight leash on costs and benefited from higher interest rates.
BofA’s shares rose about 1 percent in premarket trade.
The bank’s net income attributable to common shareholders rose to $5.12 billion for third quarter ended Sept. 30 from $4.45 billion in the year-ago period. Earnings per share rose to 48 cents from 41 cents. (bit.ly/2hDYUZK)
Analysts on average had expected earnings of 45 cents per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the reported results were comparable.
Benefiting from higher Federal Reserve interest rates, the lender’s net interest income rose 9.4 percent to $11.16 billion. The Fed is widely expected to raise rates again in December.
BofA’s large stock of deposits and rate-sensitive mortgage securities make the lender particularly dependent on a rise in interest rates to boost profits.
Trading revenue fell 15 percent, with revenue from fixed income trading down 22 percent. JPMorgan (JPM.N) and Citigroup (C.N) also reported declines in trading revenue on Thursday due to a slump in volatility.
BofA’s non-interest expenses fell 2.5 percent to $13.14 billion. Total revenue rose about 1 percent to $22.08 billion.
Reporting by Nikhil Subba and Sweta Singh in Bengaluru and Dan Freed in New York; editing by Saumyadeb Chakrabarty