NEW YORK — Financial institution of America’s earnings rose to a file $6.9 billion final quarter thanks partially to the brand new tax legislation and better rates of interest.
The buyer banking big earned $6.92 billion, or 62 cents per share, up from $5.34 billion, or 45 cents a share, from the identical interval a yr in the past. Analysts had been anticipating a per-share revenue of 59 cents, in response to FactSet.
Like its rivals JPMorgan Chase and Citigroup, Financial institution of America reported a pointy drop in its tax invoice Monday, which helped increase earnings. Whereas the financial institution’s pretax earnings rose by roughly $1 billion, the quantity it paid in taxes fell by roughly $500 million within the quarter. The Charlotte, North Carolina, financial institution estimates that the tax legislation reduce its efficient tax fee by 9 proportion factors.
This primary-quarter earnings season will give traders and the general public their first good look into how President Donald Trump’s tax legislation is impacting company America. Banks are among the many first to report outcomes initially of every quarter.
Larger rates of interest benefited the financial institution as properly. The Federal Reserve has steadily raised rates of interest, permitting banks to cost prospects extra to borrow. In Financial institution of America’s shopper banking division, its largest enterprise by income and revenue, web curiosity earnings rose 13 per cent from a yr earlier. The financial institution additionally grew loans and deposits within the quarter.
Whereas increased rates of interest ought to translate into higher rates of interest for savers, a lot of the advantages have gone to the banks, not account holders. Financial institution of America paid simply a median of 0.30 per cent on its interest-earning deposits final quarter, up from 0.09 per cent a yr earlier.
Whole income for Financial institution of America within the quarter was $23.13 billion, up from $22.25 billion in the identical interval a yr earlier.