Bank of America Corp NYSE: BAC posted higher-than-expected results in the first quarter, boosted by a jump in investment banking and trading, Reuters reports.
Wall Street banks have benefited from the so-called “Trump trade.” The Brexit vote and the U.S. Federal Reserve’s move to raise interest rates has also pushed investors to change their positions. That has boosted trading revenue for Bank of America and its competitors.
“The U.S. economy continues to show consumer and business optimism, and our results reflect that,” said Brian Moynihan, Chief Executive of Bank of America.
Revenue, excluding special items, came in at $4 billion, up 21.2%. Revenue was boosted by a 29% jump in fixed-income trading revenue.
Income from investment banking at Bank of America increased by 37.4% to $1.58 billion thanks to a revitalization in global investment banking services.
Bank of America Corp NYSE: BAC Net Income Increase
Net income increased by 44% to $4.35 billion, with earnings per share at 41 cents. Earnings beat analysts’ estimates of 35 cents per share.
Bank of America generated $11.06 billion as net interest in the first quarter, up by 5.5% from the same period last year.
Non-interest expenses were $14.85 million, virtually flat. Moynihan pledged last year to trim costs to reduce annual expenses by $5 billion by 2018.
Last week, JPMorgan Chase & Co. (JPM) said their first-quarter profit jumped 17% to $6.4 billion. Citigroup (C) reported that its profit also jumped by 17% to $4.1 billion. Wells Fargo (WFC) reported flat earnings of $5.5 billion for the quarter. The bank was hurt by news of a scandal in September, in which employees opened bank accounts in customers’ names without their consent.
The bank fired employees and has incurred hefty expenses for the fraudulent activity.
Bank of America’s shares were at $23.13, up 1.4%, in pre-market trade on Tuesday. The stock is up 34% since the presidential election in November 2016.