Revenues of the Bank of America Corp went up in the first quarter owing to the increase in earnings resulting from the customers’ interest payments amid Fed interest rate hikes. Against this backdrop, the company’s stocks jumped 3% during the pre-market trading on Tuesday.
The bank’s competitors, JPMorgan Chase and Co and Citigroup Inc, also reported the unexpected increase in the earnings as a result of the higher interest payments for the first quarter.
“Results were strong despite a challenging economic environment with market and banking sector volatility,” Alastair Borthwick, the CFO for Bank of America noted.
The increase in the earnings of the banking giants has been also prompted by the crash of the two banks in the United States. Amid the recession fears, the depositors rushed to move their money to larger institutions.
The deposits at Bank of America dropped 2%, to $1.05 trillion in the first quarter as compared to Q4. Investment banking fees demonstrated a 20% decline to 1.2 billion dollars.
Revenues from the trades involving fixed income assets, currencies and commodities totaled 3,5 billion dollars which is by 27% more than a year earlier since the demand in this area increased substantially.
Bank of America’s net interest income, which reflects how much money the bank could earn by charging interest to customers, jumped 25%, to $14.4 billion for the quarter.
Aside from that, Bank of America Corp reported the net income growth related to common shareholders to $7.66 billion, or 94 cents per share, for the three months ended March 31. That compares to $6.6 billion, or 80 cents a share, a year earlier.
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