BofA profit beats estimates on interest income, decade high trading revenue
By Manya Saini and Nupur Anand
(Reuters) -Bank of America's third quarter profits beat Wall Street estimates as it joined other big lenders in earning more on loan interest payments, while also benefiting from a better-than-expected performance in investment banking and trading.
The second largest U.S. lender said the national economy and consumer spending on travel and goods were slowing but remained resilient despite rising interest rates. The bank warned that the macroeconomic outlook was uncertain and corporations continue to hold back on deals.
«Our team of economists predicts a soft landing, with a trough in the middle of next year,» CEO Brian Moynihan told analysts.
BofA profits climbed 10% to $7.8 billion, or 90 cents per share, beating analysts' expectations of 82 cents, according to IBES data from LSEG.
Its shares were last up 3.11% in afternoon trading, outperforming a near 1.8% rise in the S&P 500 Banks Index, which tracks a basket of large-cap bank stocks.
Consumer banking revenue increased 6% year-on-year to $10.5 billion, while customer spending on debit and credit cards grew 3%. Americans' finances are beginning to flag, but delinquencies were still low compared to historical levels, the bank said.
On Friday, lenders including JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo said U.S. consumers remain in good shape even though spending has slowed and delinquencies were rising.
The country's largest lenders have enjoyed surging net interest income (NII) as the Federal Reserve has hiked interest rates to fight inflation, allowing them to charge more on loans.
Likewise, BofA said net interest income rose 4% to $14.4 billion and said fourth quarter NII should be around $14 billion, pushing
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