Bank of America’s profit climbs 10%, boosted from interest rates and loans

Revenue rose to $25.2 billion from $24.5 billion in the year-ago quarter, and was slightly ahead of the FactSet consensus of $25.13 billion.

Bank of America stock was up 1% in premarket trades.

“Bank of America’s net interest income was lifted by revenue growth in credit cards and capital markets despite a modest rise in deposit costs, while continued reserve build is another sign of responsible growth,” said Moody’s analyst David Fanger.

Analysts have trimmed their profit only slightly from the forecast of 83 cents a share set at the start of the quarter, as Bank of America’s large consumer banking unit benefited from a relatively strong U.S. economy and jobs picture.

Chief Executive Brian Moynihan said the bank added clients and accounts “across all lines of business.”

The bank managed through a “healthy but closing economy that saw U.S. consumer spending still ahead of last year but beginning to slow.”

Bank of America’s average deposit balances rose by about $1 billion from the previous quarter to $1.9 trillion, but declined by $87 billion, or 4%, from the year-ago quarter.

Global markets revenue increased by 10% to $4.9 billion, driven by higher sales and trading revenue in fixed income, currencies and equities.

The bank added 200,000 new consumer checking accounts and 1.1 million credit card accounts.

Average loan and lease balances increased by $12 billion, or 1%, to
$1 trillion, led by higher credit card balances, the bank said.

Caught up in the bearish sentiment in the sector, Bank of America stock dropped 4.6% during the third quarter. In the past month, Bank of America’s stock has dropped by 6.1%, compared to a 1.7% drop by the S&P 500
SPX.