Key insights
- Bank of America reported strong Q1 earnings, driven by equities trading and net interest income. CEO Brian Moynihan cited healthy consumer activity and stable asset quality, suggesting a resilient US economy. The strong performance in equities trading, fueled by geopolitical volatility, could signal continued market activity. Overall, the report paints a positive picture of the financial sector and consumer health, potentially supporting a bullish outlook for US equities.
In this article
Bank of America, the nation's second-largest lender, beat on the top and bottom lines during the first quarter, bolstered by equities sales and trading.
Here's what the firm reported:
The bank said Wednesday that net income rose 17% to $8.6 billion, or $1.11 per share, Bank of America's highest EPS in almost two decades.
Revenue rose 7.2% to $30.43 billion on rising net interest income, higher trading revenue, and fees from investment banking and asset management.
Equities trading contributed to the beat, as the geopolitical environment roiled stock markets. Revenue in that business jumped 30% to $2.83 billion, driving the bank's trading operations to its best quarter in 15 years. Investment banking also beat and was up 21% to $1.8 billion.
Net interest income, the profitability metric for loan-making, increased by 9% to $15.9 billion and beat as well. That was due to higher loan and deposit balances, fixed-rate asset repricing and markets activity.
"We remain watchful of evolving risks. However, we saw healthy client activity, including solid consumer spending and stable asset quality, indicating a resilient American economy," Bank of America CEO Brian Moynihan said in the release.
The net-charge-off ratio, showing what proportion of total loans were deemed unable to be collected, improved 6 basis points during the quarter to 0.48%. The firm's consumer banking and global wealth divisions each gained more than 20% in revenue.
Return on tangible common equity, a measure of profitability, was 16%, a more than 200 basis point improvement.
Correction: Bank of America previously guided to net interest income growth of between 5% and 7% this year. A previous version of this article misstated the range.