Bank of America earnings fall less than expected

Bank of America’s first-quarter profit fell less than expected as lower international transactions were offset by strength in consumer lending.

As Reuters reported on Monday April 18, Bank of America posted a 9% increase in retail banking revenue to $8.8 billion for the quarter.

Read more: Wells Fargo posts lower revenue and home loans

“First quarter results were strong despite challenging markets and volatility,” Chief Financial Officer Alastair Borthwick said in a statement.

“Net interest income increased $1.4 billion from the prior year quarter, supported by strong loan and deposit growth. Going forward, and given the anticipation of higher interest rates on the forward curve, we expect to take greater advantage of the benefits of our deposit franchise. »

Meanwhile, the bank saw its total investment banking fees drop to $1.5 billion – a 35% drop – in the quarter, while its global banking business posted $165 million in declines. provisions for credit losses, mainly because it has built up reserves related to its exposure to Russia. and an increase in lending.

“With very minor direct exposure to Russian-based companies, our teams were able to assist clients and navigate through the complexities of sanctions,” Borthwick said.

Reuters notes that Bank of America’s balance sheet is composed in such a way that it is the most sensitive of the major US banks to changes in interest rates, and should therefore benefit from rising interest rates.

See also: U.S. banks expect lower first-quarter profits as Ukraine conflict dampens investment

Wells Fargo released its first-quarter earnings report last week, showing falling revenue — a 20% reduction in profits from a year ago — and a 33% decline in home loans. Other big banks – JPMorgan Chase, Citigroup, Goldman Sachs and Morgan Stanley – also saw profit declines.

Earlier this month, Refinitiv I/B/E/S, the global financial market data provider, predicted the net income of the six largest U.S. banks would fall by more than a third from 2021.

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