the earnings of Bank of America Corp. They rose in the first quarter on the back of higher revenue from customer interest payments, as the Federal Reserve raised borrowing costs. The entity’s shares rise 3% in operations prior to the opening of the session.
Rival banking giants JPMorgan Chase and Co and Citigroup Inc also reaped a windfall from higher interest payments in the first quarter.while setting aside billions of dollars to prepare for the downturn in the economy.
“The results were strong despite a difficult economic environment and volatility in the markets and in the banking sector,” Bank of America chief financial officer Alastair Borthwick said Tuesday.
The bankruptcy of two US banks in March rocked the industry and exacerbated concerns about an impending recession. The crisis affected bank shares and caused frightened depositors to move their money to larger entities.
Deposits at BofA fell 2% to $1.05 trillion in the first quarter, compared with the fourth. The company’s investment banking fees fell 20% to $1.2 billion.
Fixed income, currency and commodity traders continued to be in high demand, bringing BofA revenue of $3.5bn, up 27% from a year earlier.
Bank of America’s net interest income, which reflects how much money the bank makes from charging customers interest, rose 25% to $14.4 billion in the quarter.
The company’s net income applicable to common shareholders was $7.66 billion, or 94 cents per share, for the three months ended March 31, the second-largest US lender said Tuesday. This number contrasts with $6.6 billion, or 80 cents per share, a year earlier.
Source: Ambito
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