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Bank of America shares are surging on better-than-expected earnings

Autor: Financial Market
Timp de citit: 2 minute

Bank of America reported net revenue for the third quarter 2022 0f $24.5 Billion, almost 8% increase compared to the the same perioad from 2021 while net income was $7.1 Billion, a decrease of 8%.

Pretax income declined 7% to $8.3 billion reflecting a reserve build compared to a reserve release in Q3-21. Revenue, net of interest expense, increased 8% to $24.5 billion.

Net interest income (NII) up $2.7 billion, or 24%, to $13.8 billion, driven by benefits from higher interest rates, including lower premium amortization expense, and solid loan growth.

Noninterest income of $10.7 billion decreased 8%, as higher sales and trading revenue was more than offset by lower investment banking and asset management fees as well as lower service charges. Provision for credit losses of $898 million increased $1.5 billion.

We continued to see strong organic client growth across our businesses, with increased client activity helping to drive revenue up by 8%. Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts.

Across the bank, we grew loans by 12% over the last year as we delivered the financial resources to support our clients. Our team adapted well to our new capital requirements and improved our CET1 ratio by 49 basis points to 11%, above our new regulatory minimums,” completed CEO Brian Moynihan.

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Consumer banking

• Net income of $3.1 billion
• Average deposits of more than $1 trillion, up $68 billion, or 7%
• Client Activity
– Added ~418,000 net new Consumer checking accounts in Q3-22; 15th consecutive quarter of growth and highest quarter since Q3-08
– Small Business checking accounts of 3.7 million, up 5%
– Digital sales grew 36%

Global Wealth and Investment Management

Net income of $1.2 billion
• Client balances of $3.2 trillion, down 12%, driven by lower market valuations, partially offset by net client flows
• Client Activity
– AUM balances of $1.3 trillion; $42 billion of AUM flows since Q3-21
– Average loan and lease balances of $224 billion, up $24 billion, or 12%; 50th consecutive quarter of average loan and lease balance growth
– Added more than 5,700 net new relationships across Merrill and Private Bank

Global banking

Net income of $2.0 billion
• Total investment banking fees (excl. self-led) of $1.2 billion, decrease of 46%, reflecting weaker industry-wide underwriting activity this year
• No. 3 in investment banking fees
• Client Activity
– Average loan and lease balances of $384 billion, up $60 billion, or 18%
– Global Transaction Services revenue of $2.8 billion, up $858 million, or 44%