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Bank of America has announced its results for the third quarter Monday morning.
Photo:
Richard B. Levine / Zuma Press
Bank of America
Corp.
LAC 0.35%
Monday said third-quarter profit rose 32%.
The quarterly earnings of the bank based in Charlotte, Northwestern United States, was $ 7.167 billion, against $ 5.424 billion a year earlier. Earnings per share was 66 cents. Analysts surveyed by Refinitiv expected 62 cents per share.
Third-quarter sales were $ 22.777 billion, up from $ 21.839 billion last year. Analysts were expecting $ 22.699 billion.
Profits continue to benefit from last year's corporate tax cut and interest rates. The rate hike is usually beneficial for banks because companies make a profit on the difference between the amount they pay on deposits and the amount they collect on loans. In September, the Federal Reserve raised its benchmark rate for the eighth time since its rise in late 2015.
Banks have been able to capture most of the benefits of the rate hike, as customers typically do not charge more interest on their deposits. Bank of America paid 0.50% on US interest-bearing deposits in the third quarter, compared to 0.38% in the second quarter.
The bank's investment banking unit continued to struggle, with fees down 18% from the previous year. The unit has slipped into key areas, including US mergers this year.
Write to Rachel Louise Ensign at [email protected]
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