Consumer loan growth and market volatility push Bank of America shares higher after Q1 earnings beat estimates

  • The growth in consumer loans has contributed to Bank of America beat his first quarter earnings estimates.
  • Consumer strength was also reflected in deposit growth, with average deposits rising 13% to $2 trillion.
  • “Organic growth combined with good expense management delivered operating leverage for the third consecutive quarter,” said BofA CEO Brian Moynihan.

Bank of America was able to count on the continued strength of consumption to lift its first-quarter results, which beat analysts’ estimates.

The bank said it benefited from a combination of strong loan growth, deposit growth, market volatility and expense management during the quarter.

“Continued organic growth combined with good expense management resulted in increased operating leverage for the third consecutive quarter,” said Bank of America CEO Brian Moynihan.

Here are the key numbers:

Revenue: $23.2 billion, versus analyst estimates of $23.1 billion
Earnings per share: $0.80, versus analyst estimates of $0.75
Provision for credit losses: $30 million, increased by $1.9 billion

The bank’s retail banking division saw its record deposit balances rise 14% to more than $1 trillion, while average deposits jumped 13% to $2 trillion. In its small business banking unit, the bank had record deposit balances up 21% to $172 billion.

In its entirety markets division, the bank recorded sales and trade revenue fell 7% to $4.7 billion, with the bulk represented by its fixed income, currencies and commodities businesses. Bank of America said it suffered zero days of trading losses in the quarter.

Bank of America’s wealth management division also generated additional growth for the business, with assets under management up 7% to $1.6 trillion. This is despite a mid-single-digit decline in the stock and bond markets during the first quarter.

Bank of America isn’t the only bank to report better-than-expected first-quarter earnings. Goldman Sachs, Morgan Stanley, JPMorgan and Citigroup all saw strong banking and trading activity despite continued uncertainty over rising inflation, rising interest rates and Russia’s invasion of Ukraine.

Bank of America shares rose more than 1% in Monday’s trading session.

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