Bank of America’s top estimates on strong investment banking and loan loss provisions


Brian Moynihan, CEO of Bank of America

Scott Mlyn | CNBC

Bank of America reported earnings Thursday that exceeded Wall Street estimates of booming investment banking and trading results and the release of credit risk reserves as fewer consumers were expected to default on credit.

The bank posted earnings of $ 8.1 billion, or 86 cents per share, in the first quarter, beating the analysts polled by Refinitiv, which was forecast at 66 cents per share. The company had sales of $ 22.9 billion, beating the estimate of $ 22.1 billion.

Like other banking competitors, Bank of America has benefited from the improving US economic outlook in recent months, releasing $ 2.7 billion in reserves for loan losses.

Here are the numbers:

Merits: 86 cents per share compared to 66 cents per share expected by analysts surveyed by Refinitiv.Revenue: $ 22.9 billion versus $ 22.1 billion that is expected.

Further key figures:

Record investment banking fees of $ 2.2 billion. Equity subscription fees of $ 900 million. FICC trade up 22% to $ 3.3 billion. Stock trading up 10% to $ 1.8 billion.

The stock gained 1.3% in early trading.

Bank of America, the second largest U.S. lender by assets, allocated $ 11.3 billion for loan losses last year as the industry believed a wave of defaults related to the coronavirus pandemic was coming. Instead, government stimulus programs appear to have prevented most of the losses feared, and banks started releasing more reserves this quarter.

Like JPMorgan and Goldman, the bank saw a boom in its trading activities.

On Wednesday, JPMorgan Chase and Wells Fargo each released results that exceeded analyst expectations for reserves disclosure, while Goldman Sachs beat estimates for strong advisory and trading results.

Bank of America stocks are up 32% this year, outperforming KBW Bank Index earnings of 26%.

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Katherine Clark