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Bank of America's 1Q Lifted by Strong Consumers, Hit by Markets

Investing.com - Bank of America (NYSE:BAC) joined most of its Wall Street peers in reporting a lacklustre set of earnings in the first quarter, as declines in its markets and investment banking businesses offset the benefits of cost-cutting and a robust increase in lending to Main Street.

Revenue edged down by $100 million from a year earlier to $23.0 billion, although earnings per share rose 13% to 70 cents, the result of over $6 billion in share buybacks over the year. The earnings result was 6% ahead of a consensus forecast of 66c, while the revenue figure missed forecasts by a whisker.

The bank's stock rose 0.2% in premarket trading in response to the news. A 10% rally over the last three weeks had led it to a seven-month high on Friday.

As with Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) on Monday, Bank of America had to deal with a slowdown in its markets division in the quarter. Adjusted revenue fell 10% from a year earlier while net income fell 26%.

By contrast, higher interest rates and solid U.S. growth underpinned a 25% increase in net profit to $3.2 billion in consumer banking. The bank’s provisions against credit losses, which analysts have been watching for signs of weakness in the economy, rose by $179 million to $1 billion.

“Our diverse business mix and commitment to responsible growth drove record quarterly earnings,” CEO Brian Moynihan said in a statement. “Economic growth and consumer activity in the U.S. continue to be solid, businesses of every size are borrowing and driving the economy, and asset quality is strong.”

BofA earnings follow Goldman disappointment on Monday

On Friday, JPMorgan reported first-quarter EPS of $2.65 on revenue of $29.85B, compared to forecasts of EPS of $2.35 on revenue of $28.44B.

However, none of JPMorgan (NYSE:JPM)'s rivals has been able to match its first-quarter performance yet. Goldman Sachs shares fell nearly 3% on Monday after it reported a drop in revenue that was only mitigated by sharp cuts in compensation costs.

Stay up-to-date on all of the upcoming earnings reports by visiting Investing.com's earnings calendar

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