Mirroring the pattern set by JPM and Citi yesterday, Bank of America reported revenue and earnings that modestly beat expectations, with Q3 revenue of $21.8BN and $22.1BN on an adjusted, FTE basis, just above the $21.9BN consensus estimate, generating net income of $5.6 billion (up 13% Y/Y), and EPS of $0.48, above the $0.46 estimate, and higher than the $0.41 reported Y/Y, even as sales and trading revenues slumped, and FICC revenue tumbled by 19%.
Net interest income increased 9% for the second consecutive quarter, or $1.0B, to $11.4B. BofA achieved this as its Net Interest Yield (i.e. NIM) rose fractionally from 2.34% in Q2 to 2.36% in Q3, a number just barely higher than the 2.35% expected. As the bank explained, the Net Interest Income increased “reflecting the benefits from higher short-end interest rates, loan growth and one additional interest accrual day, partially offset by higher deposit pricing in GWIM and the full quarter impact from the sale of the non-U. S. consumer credit card business.”
BofA also gave the following interest rate sensitivity as of Sept 30: “+100bps parallel shift in interest rate yield curve is estimated to benefit NII by $3.2B over the next 12 months, driven primarily by sensitivity to short-end interest rates.”
This post was published at Zero Hedge on Oct 13, 2017.
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