Bank of America posted first-quarter profit that beat analysts’ estimates as lending margins improved and trading revenue surged.
Net income jumped 40% to $4.86 billion, or 41 cents a share, from $3.47 billion, or 28 cents, a year earlier, the company said in a news release Tuesday. That beat the 35-cent average estimate of 27 analysts surveyed by Bloomberg. Total revenue increased 7% to $22.2 billion, exceeding estimates. Expenses increased less than 1% to $14.8 billion.
Net interest income climbed 5.5% to $11.1 billion from a year earlier, in line with analysts’ estimates. Net interest margin rose 16 basis points to 2.39 percentage points from the previous quarter, exceeding predictions.
Bank of America shares climbed 1% to $23.03 in early trading at 7:03 a.m. in New York.
Profit from the global markets division, which houses the bank’s trading units, climbed 33% to $1.3 billion. Investment banking revenue rose 37% to $1.58 billion, compared with analysts’ $1.41 billion estimate.
Fixed-income trading revenue rose 29% to $2.93 billion, beating analysts’ $2.6 billion average estimate. Equity trading climbed 7.4% to $1.1 billion, compared with estimates of $1.01 billion.
“The U.S. economy continues to show consumer and business optimism, and our results reflect that,” CEO Brian Moynihan said in the release.
Bank stocks have climbed since November’s U.S. election in part on expectations that interest rate increases by the Federal Reserve would boost profits. Bank of America, which is among the most sensitive to interest rate changes, has led the surge among the country’s biggest lenders, gaining 38% through Monday.
