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Bank of America Reports Record Earnings in Q1

Bank of America continued a trend that began on Friday, with some of the country’s largest banks reporting earnings that exceeded industry estimates. In fact, Bank of America reported record quarterly earnings of $6.9 billion on Monday, with its pretax earnings of $8.4 billion up 15 percent.

The bank also increased its lending during the quarter, driven by an increase in consumer spending. It reported an increase of 3 percent in loans to $352 billion. Its noninterest income increased $327 million to $11.5 billion marking a 3 percent increase over the last quarter, while its noninterest expenses declined 1 percent to $13.9 billion.

“Our responsible growth model continues to deliver consistent results. Strong client activity, coupled with a growing global economy and solid U.S. consumer activity, led to record quarterly earnings,” said Brian Moynihan, CEO, Bank of America.

While Bank of America’s net of interest revenue increased 4 percent to $23.1 billion, its net interest income increased 5 percent to 11.6 billion, reflecting the benefits from higher interest rates that have been seen in the market since the beginning of the year. It was also reflective of loan and deposit growths that increased during the quarter.

“This was a strong quarter. Revenue was up 4 percent year-over-year and expenses were down 1 percent, making this the thirteenth consecutive quarter of positive operating leverage,” said Paul Donofrio, CFO, Bank of America. “We also carefully managed credit costs. This enabled us to deliver double-digit EPS growth. We also returned $6.1 billion in capital to our shareholders through dividends and common stock repurchases.”

The bank’s Provision for credit losses increased $97 million to $935 million, primarily driven by credit card seasoning and loan growth.

The bank reported a strong overall credit quality across its consumer and commercial portfolios and its nonperforming assets declined $943 million to $6.7 billion driven primarily by loan sales and credit quality improvement.

About Author: Radhika Ojha

Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. You can contact her at Radhika.Ojha@theMReport.com.
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