Higher interest rates are helping boost financial results at Bank of America. The bank says profits rose 40 percent in the first three months of the year, compared with a year ago. B of A also saw growth in all its major businesses.
CEO Brian Moynihan told analysts the improving climate has helped.
“If you look at it overall, we've been able to outgrow the economy. But we're going to be dependent upon the economy to keep growing,” he said in a conference call Tuesday morning.
Profits were just under $4.9 billion, up from $3.5 billion a year earlier. Revenues also were up 7 percent, to $22.3 billion.
Earnings per share were 41 cents, beating analysts' estimates of 35 cents. B of A's share price rose as much as 1.5 percent this morning, before falling back.
BofA said customer growth across all its businesses was good.
Net interest income - what BofA earns on the difference between what it pays out for deposits and what it charges for loans - was up 5 percent, to $11.1 billion, compared to a year ago.
In consumer banking, the largest part of the company, profits were up 7 percent compared with the first quarter of 2016. Revenues in the business were up 5 percent. The bank reported strong growth in deposits, but slightly lower revenues from mortgages.
Investment banking fees hit a new high, rising 37 percent. That was well ahead of the industry average. Chief financial officer Paul Donofrio said it was the bank’s best quarter ever in fees for helping clients with mergers and acquisitions.
“We also earned record M&A fees this quarter, with involvement in six of the top 10 completed transactions,” Donofrio said.
The strong quarter was a turnaround from a year ago, when uncertainty about interest rates and slow global markets sent profits down 18 percent.
See BofA's earnings announcement and investor presentation at BankofAmerica.com