Bank of America beats, delivers a record quarter

Bank of America Merrill Lynch just announced first-quarter earnings results, beating analyst estimates with earnings per share of $US0.62. Analysts had been expecting the bank to report adjusted earnings per share of $US0.59.

The beat was driven by higher interest rates and lower taxes, while the bank’s equities trading unit had a record quarter, echoing a similar performance in that unit at JPMorgan and Citigroup.

Here are the key numbers:

  • Revenue: $US23.1 billion, marginally ahead of analyst expectations of $US23 billion. Net interest income increased by $US550 million, driven by higher rates.
  • Adjusted net income: $US6.9 billion, a record high, and well ahead of analyst expectations.
  • Consumer banking: Net income increased to $US2.7 billion, up 42%, driven by higher interest rates.
  • Global wealth management: Net income increased 34% to $US1 billion, again driven by higher rates.
  • Global banking: Net income increased 17% to $US2 billion, despite a slight decline in revenues, thanks to a lower tax bill.
  • Global markets: Net income increased 12% to $US1.5 billion. Sales and trading revenues were up 6% to $US4.1 billion, driven by a huge gain in equities, where revenues increased 38% to a record $US1.5 billion. That performance echoes similar gains in the equities businesses at JPMorgan and Citigroup.
  • Deposits: Average deposit balances increased to $US1.3 trillion, a record high.

“Strong client activity, coupled with a growing global economy and solid U.S. consumer activity, led to record quarterly earnings,” CEO Brian Moynihan said in a statement. “We grew loans in our business segments by $US45 billion and increased deposits by $US41 billion.”

JPMorgan and Citigroup announced first-quarter earnings on Friday, with both beating solidly. The two banks also posted gains in markets revenue, with JPMorgan’s markets revenue up 7% on an underlying basis and Citigroup’s total markets and securities revenue up 3%.

Those gains were driven by equities revenue, with JPMorgan posting record equities revenue of $US2 billion and Citigroup posting a 38% gain in equities revenue to $US1.1 billion. Fixed income revenues, in contrast, were flat at JPMorgan, and down at Citigroup.

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