Bank of America Corp (NYSE:BAC) reported third-quarter 2024 net income of $6.9 billion and earnings per share of $0.81, beating analysts’ consensus estimate of $0.77. Net profit fell 12% year-on-year due to higher provisions for credit losses and rising costs.
Revenue, net of interest expense, rose 1.0% year over year to $25.49 billion, surpassing analysts’ consensus estimate of $25.29 billion.
Also read: JPMorgan Chase third quarter profit: investment banking revenue rises 29%, largest bank raises net interest income forecast.
Increases in trading, asset management and investment banking fees offset the decline in net interest income. The stock gained after the quarterly push.
Segment Net result: Consumer Banking $2.69 billion vs. $2.86 billion Y/Y, Global Wealth and Investment Management $1.06 billion vs. $1.03 billion Y/Y, Global Banking $1.9 billion vs. $2.6 billion Y/Y, and Global Markets $1.55 billion vs. $1.26 billion Y/Y Y.
Investment banking costs rose 18% to $1.40 billion. Net interest income was $14.1 billion (-3.0% year over year), as higher asset returns and loan growth were more than offset by higher deposit costs. Non-interest income was $11.4 billion (+5.5% YoY). The provision for credit losses remained stable Y/Y at $1.5 billion.
The efficiency ratio for the quarter was 64.64% versus 62.55% on an annual basis. The bank reported a CET1 ratio of 11.8%, an increase of 112 basis points from a year ago. Book value per share of $35.37 improved by 8%.
The average loan and lease balance was $1.06 trillion (+1.0% annualized). Average deposits increased 2% year over year to $1.92 trillion. Bank of America added ~1.0 million credit card accounts during the quarter.
Outlook: For the second quarter, Bank of America said it expects net interest income of ~$14.50 billion in the fourth quarter, assuming a 25 basis point rate cut.
Bank of America shares are up more than 55% in the past twelve months.
In September, the US Fed cut lending rates by 50 basis points, lowering the central bank’s benchmark interest rate to 4.75%-5% to stimulate demand. This could help banks through lower interest rates and promoting lending activities.
Price promotion: BAC shares are up 2.10% to $42.79 premarket at last check Tuesday.
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This article Bank of America Q3 Earnings: Earnings Drop 12% on Loan Loss Provisions, Investment Banking Costs Rise 18% originally appeared on Benzinga.com
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