Brian Moynihan, CEO of Financial institution of America
Heidi Gutman | CNBC
Financial institution of America topped estimates for third-quarter revenue on Tuesday on stronger-than-expected curiosity revenue.
This is what the corporate reported:
- Earnings per share: 90 cents vs. anticipated 82 cent estimate from LSEG, previously often known as Refinitiv
- Income: $25.32 billion, vs. anticipated $25.14 billion
Revenue rose 10% to $7.8 billion, or 90 cents per share, from $7.1 billion, or 81 cents a share, a yr earlier, the Charlotte, North Carolina-based financial institution mentioned in a launch. Income climbed 2.9% to $25.32 billion, edging out the LSEG estimate.
Financial institution of America mentioned curiosity revenue rose 4% to $14.4 billion, roughly $300 million greater than analysts had anticipated, fueled by larger charges and mortgage progress.
CEO Brian Moynihan mentioned the financial institution continued so as to add purchasers regardless of financial pressures. Whereas client banking deposits had been down 8% within the quarter, the section posted a 6% enhance in income to $10.5 billion, in accordance with the corporate.
“We did this in a wholesome however slowing economic system that noticed U.S. client spending nonetheless forward of final yr however persevering with to gradual,” he mentioned in an earnings launch.
Financial institution of America was supposed to be one of many greatest beneficiaries of upper rates of interest this yr. As a substitute, the corporate’s inventory has been the worst performer amongst its big-bank friends in 2023. That is as a result of, below CEO Brian Moynihan, the lender piled into low-yielding, long-dated securities throughout the pandemic. These securities misplaced worth as rates of interest climbed.
That is made Financial institution of America extra delicate to the current surge within the 10-year Treasury yield than its friends — and extra much like some regional banks which can be additionally nursing underwater bonds. Financial institution of America had greater than $100 billion in paper losses on bonds at midyear.
The scenario has pressured the financial institution’s internet curiosity revenue, or NII, which is a key metric that analysts can be watching this quarter. In July, the financial institution’s CFO, Alistair Borthwick, affirmed earlier steerage that NII can be roughly $57 billion for 2023.
Financial institution of America shares had been up about 1% in premarket buying and selling Tuesday. The inventory unhealthy fallen 18% this yr via Monday, trailing the ten% achieve of rival JPMorgan Chase.
Final week, JPMorgan, Wells Fargo and Citigroup every topped expectations for third-quarter revenue, helped by better-than-expected credit score prices. Morgan Stanley posts outcomes Wednesday.
This story is growing. Please verify again for updates.
