Bank of America Corp. , the giant U.S. bank, said first-quarter profit surged 30% as taxes decreased following President Donald Trump's cuts in the corporate rate, while higher interest rates boosted lending revenue.
Bank of America's net income rose to $6.9 billion from $5.3 billion a year earlier, according to a statement Monday from the Charlotte, North Carolina-based bank. Earnings per share climbed to 62 cents, beating the 59-cent average estimate of analysts in a survey by database provider FactSet.
Net interest income, or what the bank earns on loans and other assets minus what it pays out on deposits and other funding, rose 5% to $11.6 billion, "reflecting benefits from higher interest rates as well as loan and deposit growth," according to the statement. The corporate tax rate fell by 9 percentage points.
"Strong client activity, coupled with a growing global economy and solid U.S. consumer activity, led to record quarterly earnings," CEO Brian Moynihan said in the statement.
Wall Street firms have benefited from a resurgence in stock-market volatility as traders speculate over the pace of Federal Reserve interest-rate increases, U.S. trade tensions with China and the data-privacy scandal at Facebook Inc. . The CBOE Volatility Index, a key gauge of market volatility known as the "VIX," was 43% higher on average during the quarter.
Bank of America's stock-trading revenue surged 38% in the period, driven by higher client activity and a strong trading performance in derivatives. In the fixed-income trading unit, which includes bonds and foreign exchange, revenue fell by 13%.
The bank's profit growth still lagged that of its larger peer, JPMorgan Chase & Co. , which said Friday that first-quarter profit jumped 35%, also driven by the tax cuts. At Citigroup Inc. , a rival Wall Street bank, profit climbed 13%.
San Francisco-based Wells Fargo & Co. , struggling to recover from a series of regulatory penalties over allegedly aggressive sales practices, posted a 5.5% profit increase on a preliminary basis, noting that legal costs might have to be revised higher pending discussions with regulators over as much as $1 billion of new penalties related to auto insurance and mortgage-related violations.
Goldman Sachs Group Inc. and Morgan Stanley are scheduled to post results later this week.
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