Profit for First Quarter Up 40% at Bank of America
Bank of America CEO Brian Moynihan was optimistic on Monday. He said the economy in the U.S. continued to show optimism by both consumers and business owners and the results for the most recently ended quarter reflect that.
In addition, the bank added 550 employees during its first quarter, which is the first net employee increase dating back to 2011.
Bank of America posted an increase of 40% in its profit for the first quarter, fueled in part by strong revenue form trading.
Revenue from fixed-income trading increased by 29% to end the quarter at $2.93 billion, said the second largest bank in the U.S. late Tuesday in a prepared statement. That figure beat estimates of analysts of $2.6 billion.
Revenue from equity trading was also higher than had been expected reaching $1.1 billion reflecting a surge of 7.4%.
Last week both Citigroup and JPMorgan Chase also posted robust revenue for the first quarter from their bond trading. JPMorgan, the largest bank in the U.S. by assets, posted a gain of 17% in its revenue from fixed income trading.
Citigroup generated its most revenue in three years from that same business. However, that contrasts with Goldman Sachs, which Tuesday posted fixed-income revenue that was less than had been expected.
Bank stocks are up since November’s election in the U.S. partly due to expectations of rate increases by the Federal Reserve that would help boost their profits.
Bank of America, based in Charlotte, North Carolina is amongst the most sensitive banks when it comes to changes in the interest rates, and has led to the surge amongst the biggest lenders of the country by gaining 38% through the end of trading on Monday for 2017.
Net interest income was up 5.5% to end the quarter at just over $11.1 billion compared to the same quarter one year ago, and exceeding the forecast of the bank.
Its net interest margin, which is the difference between what it pays depositors and charges for its loans, increased by 16 basis points to end the quarter at 2.39 percentage points from the quarter before, which was the biggest amongst the large banks in the U.S.
The company expects an increase of $150 million in its interest income for the second quarter from first quarter, said its CFO Paul Donofrio during a conference call with analysts.