Bank of America, which employs more than 800 people in Ireland, reported an increase in third-quarter profits as the US’s second-largest bank continued to benefit from higher interest rates and its traders delivered their best performance in a decade.
Profits climbed 10 per cent to $7.8 billion (€7.4 billion) in the quarter from a year ago, the bank said on Tuesday, as its revenues edged up 3 per cent.
The bank’s Wall Street businesses, notably its fixed-income and equities trading, proved a bright spot in a quarter marked by volatility across bond markets.
Revenues at its sales and trading business climbed 8 per cent to $4.4 billion, including a 10 per cent jump in revenue from its equities business, which hit $1.7 billion.
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Third-quarter results from the biggest US banks have proven more resilient than analysts expected given concerns that the US economy may be facing a downturn as interest rates stay higher for longer.
Spending by Bank of America’s credit card customers rose 3 per cent in the quarter compared with a year ago. Lending also increased, but only by 1 per cent.
In a sign that the bank is braced for some stress among its customers, it set aside $1.2 billion for potential loan losses, up more than 20 per cent from the same period a year ago.
“Our team-mates delivered another strong quarter,” said Bank of America chief executive Brian Moynihan in a statement released with the earnings. “We did this in a healthy but slowing economy that saw US consumer spending still ahead of last year but continuing to slow.”
[ Citi profits edge higher despite worries over consumer financesOpens in new window ]
While the bank managed to increase earnings in the quarter, it did so at a slower pace than some rivals. Wells Fargo and JPMorgan last week reported a 68 per cent and 38 per cent jump in profits respectively. Earnings at Citigroup, which last month announced a big restructuring in a bid to remedy years of poor performance, reported a 2 per cent rise in third-quarter profits.
Bank of America shares were up 1 per cent in pre-market trading following the results.
– Copyright The Financial Times Limited 2023
