Bank of America Corp reported a better-than-expected rise in quarterly profiton Monday as the second-largest U.S. lender reined in costs, while higher interest rates and loangrowth helped offset lower bond trading revenue.
Like its peers, the bank has benefited from U.S. President Donald Trump's tax cuts and a rise in interest rates. A strong job market has also kept bad loans in check and borrowing healthy.
BofA relies heavily on higher interest rates to maximize profits as it has a large deposit pool and rate-sensitive mortgage securities.
Total interest income - the difference between what a lender earns on loans and pays on deposits - rose 6.4 percent to $11.87 billion. Total deposits rose nearly 5 percent to $1.35 trillion.
"Responsible growth, backed by a solid U.S. economy and a healthy U.S. consumer, combined to deliver the highest quarterly pre-tax earnings in our company's history," Chief Executive Officer Brian Moynihan said in a statement.
Shares of Bank of America rose 0.6 percent in early trading on Monday.
Net income applicable to common shareholders rose 35 percent to $6.7 billion in the third quarter ended Sept. 30.
Excluding items, the bank earned 67 cents per share, beating the average analyst estimate of 62 cents per share, according to I/B/E/S data from Refinitiv.
Non-interest expense fell 2.4 percent to $13.07 billion.
(Reporting by Siddharth Cavale in Bengaluru; Editing by Anil D'Silva)
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