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Bank of America’s (NYSE:BAC) Q3 earnings topped the Wall Street estimate, aided by higher interest rates and strength in its Global Markets business, which rose Q/Q and Y/Y.
Q3 EPS of $0.90, beating the average analyst estimate of $0.82, rose from $0.88 in Q2 and $0.81 in Q3 2022.
“We added clients and accounts across all lines of business,” said Chair and CEO Brian Moynihan. “We did this in a healthy but slowing economy that saw US consumer spending still ahead of last year but continuing to slow.”
Net interest income (FTE basis) increased to $14.5B (compared with $14.2B Visible Alpha consensus) from $14.3B in the prior quarter and $13.9B in the year-ago period. In September, the bank had forecast Q3 NII of $14.2B-$14.3B.
Noninterest income of $10.8B vs. $10.9B Visible Alpha estimate, $11.0B in Q2 and $10.7B in Q3 2022.
Provision for credit losses rose to $1.23B from $1.13B in the previous quarter and $898M in the year-ago quarter. Those include net reserve builds of $303M in the current quarter, $256M in Q2 and $378M in Q3 2022.
Q3 noninterest expense of $15.8B dropped from $16.0B in the previous quarter and rose from $15.3B in the year-ago period.
Return on average tangible common shareholders’ equity was 15.47%, vs. 15.49% in the previous quarter and 15.21% in the year-ago quarter.
Consumer Banking revenue of $10.5B was flat vs. Q2 and rose from $9.90B in Q3 2022; net income of $2.86B vs. $2.85B and $3.07B.
Global Wealth and Investment Management revenue of $5.32B vs. $5.24B in the previous quarter and $5.43B the year-ago quarter; net income was $1.03B vs. $978M and $1.19B.
Global Banking revenue dropped to $6.20B from $6.46B in Q2 and increased from $5.59B in Q3 2022; net income climbed/fell to $2.57B from $2.65B and $2.04B. Total investment banking fees (excluding self-led) rose 2% Y/Y to $1.2B.
Global Markets revenue of $4.94B rose from $4.87B in Q2 and $4.48B in Q3 2022; net income (ex-DVA) of $1.26B vs. $1.18B and $1.08B. Sales and trading revenue of $4.4B rose 8% Y/Y, with revenue from fixed income, currency, and commodity trading rising 6% to $2.7B; while equities trading rose 10% to $1.7B.
Conference call at 8:30 AM ET.
Earlier, Bank of America (BAC) GAAP EPS $0.90 beats by $0.08, revenue of $25.2B beats by $130M