BofA’s results appeared stronger than those reported on Thursday by its rivals JPMorgan Chase and Citigroup © Bloomberg

Bank of America has reported a 13 per cent rise in quarterly profits, as growth in consumer banking and wealth management offset a sharp decline in bond trading revenues.

BofA, an industry powerhouse that operates more than 4,600 branches and has $2.3tn in assets, said its third-quarter net profits were $5.6bn — at the top end of analysts’ consensus expectations. 

The country’s second-biggest bank by assets reported a slight increase in quarterly revenues to $21.8bn, in line with analyst expectations. Provisions for bad loans declined 2 per cent, while overall lending grew 6 per cent. 

“Revenue across our four lines of business grew 4 per cent, even with a challenging comparable quarter for trading,” said Brian Moynihan, chairman and chief executive. 

The results appeared stronger than those reported by its rivals JPMorgan Chase and Citigroup, which on Thursday said their net profits rose 7 per cent and 8 per cent respectively. 

James Chappell, banks analyst at Berenberg, said BofA’s lower provisions for bad loans “potentially begins to support view that BofA [has] better risk quality than perceived and relative to others”.

Shares in BofA have risen 58 per cent in the past year, lifted by the “Trump bump” as investors piled into the sector expecting a combination of lower taxes, rising interest rates and lighter regulation to boost earnings. 

Yet executives caution that many recent developments in Washington have been a hindrance, not a help. Policy gridlock is making corporate America more reluctant to borrow, putting a lid on the revenues banks produce from lending. 

The Federal Reserve’s increases in base rates boosted BofA’s net interest margin — the difference between what it charges borrowers and pays out to savers — from 2.34 to 2.36 per cent. 

Like rivals on Wall Street, BofA’s capital markets business suffered from a recent quiet period in the market that has led to a dearth of trading among clients. 

Revenues at its global markets unit fell 15 per cent in the quarter, while net profits fell 30 per cent in the unit. Fixed income trading revenues were down 22 per cent.

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