The second-biggest U.S. bank by assets, Bank of America reported Wednesday that profits jumped 10 percent from a year ago to $7.1 billion, setting a new record.
The Charlotte, North Carolina, bank was able to grow both loans and deposits in the quarter, despite the rise in interest rates for loans and less yield on deposits.
Net interest income rose 3% from a year earlier but fell about 1.5% from the prior quarter.
The biggest USA banks are benefiting from a solid job market, relatively strong economic growth and Federal Reserve interest-rate increases stretching back to late 2015. It's allowed banks to charge more for consumers and businesses to borrow.
Brian Moynihan, chairman and chief executive of BofA, said: "Our view of the economy reflects the activity by the one-in-two American households we serve, which points to a steadily growing economy". Elsewhere, global banking revenue declined 0.8% to $4.98 billion and global wealth and investment management revenue increased 3.3% to $4.90 billion.
Growth in the consumer business helped offset softness in market revenue and Wall Street businesses. Net income rose to $7.11 billion, or 74 or cents a share, from $6.47 billion, or 63 cents a share, in the same period a year ago.
The lender announced last month it would return as much as US$37 billion to shareholders over the next four quarters by raising its dividend by 20 per cent and boosting stock buybacks. Analysts were looking for BofA to earn 71 cents a share, according to FactSet. Fixed income trading revenue dropped 8% to $2.13 billion, essentially matching estimates, while equities trading fell 13% to $1.15 billion, just below the $1.22 billion estimate.
Bank of America (NYSE:BAC) posted profit that exceeded analysts' expectations on strength in its sprawling retail arm.