Bank of America profit tops estimates as lender releases reserves for soured loans
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Bank of America reported first-quarter earnings before the opening bell Monday.
Here are the numbers:
Earnings: 80 cents a share vs 75 cents a share Refinitiv estimate.
Revenue: $23.33 billion vs $23.2 billion estimate
Here's what Wall Street expected:
Bank of America is supposed to be one of the big beneficiaries of rising interest rates — but will that be enough to offset declines in investment banking?
That's the question of the moment after JPMorgan Chase, Goldman Sachs and Citigroup all disclosed sharp drops in first-quarter advisory revenues.
Bank of America, led by CEO Brian Moynihan, had enjoyed tailwinds as rising interest rates and a rebound in loan growth promised to boost income. But bank stocks got hammered this year amid concerns that higher inflation would help spark a recession, which would lead to higher defaults.
While longer-term rates rose during the quarter, short term rates rose more, and that flat, or in some cases inverted, yield curve spurred concerns about an economic slowdown ahead.
Bank of America shares have fallen 15% this year before Monday, worse than the 11.6% decline of the KBW Bank Index.
Last week, JPMorgan said profit slumped as it posted losses tied to Russia sanctions and set aside money for future loan losses. Goldman, Morgan Stanley and Citigroup each topped expectations with stronger-than-expected trading results, and Wells Fargo missed on revenue amid a decline in mortgage lending.
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