Bank of America (BAC) Q3 2022 earnings

Bank Of America CEO Brian Moynihan is interviewed by Jack Otter during “Barron’s Roundtable” at Fox Business Network Studios on January 09, 2020 in New York City.

John Lamparski | Getty Images

Bank of America said Monday that profit and revenue topped expectations on better-than-expected fixed-income trading and gains in interest income, thanks to choppy markets and rising rates.

Here are the numbers:

  • Earnings:  81 cents vs. the 77 cents a share estimate of analysts surveyed by Refinitiv.
  • Revenue: $24.61 billion vs. $23.57 billion estimate

Bank of America said in a release that third-quarter profit fell 8% to $7.1 billion, or 81 cents a share, as the company booked a $898 million provision for credit losses in the quarter. Revenue net of interest expense jumped to $24.61 billion.

Shares of the bank rose 3.1% in premarket trading.

Bank of America, led by CEO Brian Moynihan, was supposed to be one of the main beneficiaries of the Federal Reserve’s rate-boosting campaign. That is playing out, as lenders including Bank of America, JPMorgan Chase and Wells Fargo are producing more revenue as rates rise, allowing them to generate more profit from their core activities of taking in deposits and making loans.

“Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts,” Moynihan said in the release. “Across the bank, we grew loans by 12% over the last year as we delivered the financial resources to support our clients.”

Net interest income at the bank jumped 24% to $13.87 billion in the quarter, topping the $13.6 billion StreetAccount estimate, thanks to higher rates in the quarter and an expanding book of loans.

Fixed income trading revenue surged 27% to $2.6 billion, handily exceeding the $2.24 billion estimate. That more than offset equities revenue that slumped 4% to $1.5 billion, below the $1.61 billion estimate.

Like its Wall Street rivals, investment banking revenue posted steep declines, falling about 45% to $1.2 billion, slightly exceeding the $1.13 billion estimate.

Bank of America shares have fallen 29% this year through Friday, worse than the 26% decline of the KBW Bank Index.

Last week, JPMorgan and Wells Fargo topped expectations for third-quarter profit and revenue by generating better-than-expected interest income. Citigroup also beat analysts’ estimates, and Morgan Stanley missed as choppy markets took a toll on its investment management business.

This story is developing. Please check back for updates.

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