(Reuters) – Bank of America reported quarterly profit down 13% on Monday, less than expected as growth in its retail lending business limited the impact of a slowing mergers and acquisitions market.
The American group reported a 9% increase in revenue from its retail banking activities over the first three months of the year, to 8.8 billion dollars (8.15 billion euros).
“First quarter results are strong despite challenging markets and volatility,” Chief Financial Officer Alastair Borthwick said in a statement.
“Net interest income increased $1.4 billion from the same quarter last year, supported by strong loan and deposit growth.”
Meanwhile, revenue from investment banking activities plunged 35% to $1.5 billion.
The group’s “Global Banking” division, which includes these activities, posted 165 million dollars of provisions intended to cover possible credit losses, mainly in connection with the exposure to Russia and the growth of the loan portfolio.
The second largest US bank by assets has also taken over $362 million in reserves built up to cover possible defaults.
Net interest income rose 13% year on year to $11.6 billion in the first quarter.
Due to the composition of its balance sheet, Bank of America is more sensitive than other major US banks to changes in interest rates.
Its profit attributable to shareholders fell nearly 13% to $6.6 billion, or 80 cents per share, from $7.56 billion (86 cents/share) a year earlier.
The result for the first quarter of 2021 had been boosted by record profits in mergers and acquisitions and significant reversals of provisions.
On the contrary, taxable profit excluding provisions increased by almost 8%.
Financial analysts on average had expected earnings per share of 75 cents according to Refinitiv-IBES data.
Bank of America shares gained about 1% in pre-market trading on Wall Street.
(Reporting Noor Zainab Hussain and Niket Nishant in Bangalore, Elizabeth Dilts Marshall in New York; French version Marc Angrand)
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