Bank of America posts better-than-expected Q1 profits, but shares decline
By Alexander Bueso
Date: Tuesday 16 Apr 2019
(Sharecast News) - Bank of America posted record quarterly net income driven by a jump in the profitability of its consumer banking arm.
For the three months to 31 March, the lender saw net profits rise by 6% to $7.3bn, for adjusted earnings per share of 70 cents (consensus: 66 cents), for an improvement of 13% on a year ago, even as revenues dipped by 0.4% to $23.0bn.
However, in a call with analysts, the lender guided towards a slowdown in net income growth from 6% in the year before to 3% in 2019, versus an increase of 5% for the first three months of the year.
Revenues at BofA's consumer banking arm increased 7% to $9.6bn as net interest income rose by 10% to $629m, on the back of higher interest rates and deposit and loan growth.
The bank's net interest margin improved by nine basis points on the year ago figure to 2.51%.
As a result, net income at that unit soared 25% to $3.2bn.
Over at its Global Wealth&Investment Management arm meanwhile, net income was up by 14% to $1.0bn, despite a 1% reduction in sales.
In Global Banking, net income edged higher by 2% to $2.0bn.
But in Global Markets, net income shrank by 26% to $1.0bn, with revenues off by 13% to $4.2bn and by the same proportion at its trading unit.
Total non-interest expense meanwhile fell by 4.5% versus a year earlier to $13.22bn.
Versus the year-ago quarter, equity trading revenues declined by 12% to $1.19bn and those from its Fixed Income, Commodities and Currencies unit fell by 6.6%.
As of 1644 BST, shares in the lender were trading down by 1.63% to $29.36.
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