Bank of America outperformed expectations in its third-quarter earnings report, fueled by stronger-than-anticipated interest income. The bank’s profit increased by 10% to $7.8 billion, equivalent to 90 cents per share, compared to the previous year’s $7.1 billion, or 81 cents per share. The revenue also showed a 2.9% growth, reaching $25.32 billion, slightly exceeding LSEG’s estimate. Bank of America attributed its success to a 4% rise in interest income, totaling $14.4 billion, approximately $300 million more than what analysts had predicted. This increase was driven by higher interest rates and growth in loans. Furthermore, the bank’s provision for credit losses came in better than expected, at $1.2 billion, which was below the estimated $1.3 billion.
Following the release of these results, Bank of America’s shares closed more than 2% higher. Analyst Mike Mayo of Wells Fargo commented that the bank had successfully navigated potential pitfalls associated with loan losses and rising interest rates. He described the quarter as “okay” but noted that it fell short of the results achieved by JPMorgan and Citigroup. Bank of America’s CEO, Brian Moynihan, highlighted the bank’s continued growth despite signs of an economic slowdown. He emphasized that they had acquired new clients and accounts across all lines of business, even in a healthy yet decelerating economy, where U.S. consumer spending still outpaced the previous year but continued to slow down.