Bank of America posted a 12% decline in first-quarter profits from a year earlier, a decline that was much less than the ones its rivals had reported the previous week.
Photo Insert: Bank of America insists that the profit drop is not bad news.
The nation’s second-largest bank was helped by higher net interest income and very modest exposure to Russian assets, Ken Sweet reported for the Associated Press (AP).
The Charlotte, North Carolina-based bank said it earned a profit of $7.1 billion, or 80 cents a share, compared with a profit of $8.05 billion, or 86 cents a share, in the same period a year earlier. The results were better than what analysts forecasted, according to FactSet.
While BofA’s profits fell like the other big five Wall Street banks this quarter, their results were helped by a few factors that helped the bank do better than its rivals. The bank saw net interest income increase 13% in the quarter, roughly $1.4 billion.
BofA’s balance sheet is more skewed to bonds with shorter maturities, so short-term moves in interest rates tend to quickly impact the bank’s bottom line.
BofA’s consumer banking division, the bank’s largest business by revenue and profits, also helped boost results. Net income in the division was up 11% from a year earlier, helped by higher revenue from loans and interest rates. Deposits also grew quite noticeably, up 14%, to $1.06 trillion.
“This is not a bad result for Bank of America, particularly the continued solid loan growth,” said David Wagner, portfolio manager at Aptus Capital Advisors, who owns BofA shares, in an email.