The company’s investors are bullish on the BAC stock following the earnings release.
American multinational financial services giant Bank of America Corp (NYSE: BAC) has released its first quarter (Q1 2023) performance report which shows significant growth milestones. According to details shared by the bank, its revenue came in at $26.39 billion as against the $25.13 billion expected from analysts.
The Charlotte, North Carolina Headquartered bank also saw a shift in its Earnings Per Share (EPS), recording a total of 94 cents as against the 84 cents profiles by analysts. The bank attributed its impressive performance in the quarter to the rising interest rate from the Federal Reserve as the apex bank doubled down on its resolve to curb the inflationary surge this year.
“Every business segment performed well as we grew client relationships and accounts organically and at a strong pace,” CEO Brian Moynihan said in a statement. “Our results demonstrate how our company’s decade-long commitment to responsible growth helped to provide stability in changing economic environments.”
According to the bank, its net interest income, its measure of capital lend out to customers and the interest it paid to depositors jumped by 25% from the same period last quarter. In dollar terms, the net interest income topped $14.4 billion and also benefitted from the rising rates.
Bank of America did not impressive all around as some of its core business segments including asset management and investment banking recorded a slump in revenue. However, this reduction was complemented by the $11.8 billion revenue raked from higher sales and trading revenue.
Bank of America has unleashed a lid that was filled with uncertainty in what the outlook of American banks could be for the first quarter. The company’s investors are bullish on the BAC stock following the earnings release. At the time of writing, the company’s shares are up by 2.17% in the pre-market to $31.03.
Bank of America amid the Q1 2023 Banking Mishaps
The Bank of America was a prominent figure in the banking industry in the first quarter as many popular regional banks showcased liquidity distress that sent the likes of Silicon Valley Bank (SVB) closing up shops.
Amidst all these, Bank of America joined the list of mainstream banks that pledged support for First Republic Bank (NYSE: FRC) when it was experiencing a similar bank run as SVB experienced. While the FTX Derivatives Exchange story has shown that pledging support for other companies is not necessarily a sign of financial health, the impressive earnings report is a confirmation of the health of Bank of America.
“We delivered our seventh straight quarter of operating leverage. We further strengthened our balance sheet and maintained strong liquidity,” Moynihan said.
The banking giant said its sale and trading revenue jumped by $5.1 billion, up 7.5% from the year-ago period.
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