(BAC) reported Friday higher profit in its third quarter, benefited by higher net interest income and lower provision for credit losses. Per-share earnings of 48 cents were up from a year earlier and topped analyst expectations of 45 cents a share.
The lender posted its highest net income in six years as the chief executive officer cut expenses more than forecast and net interest income rose to the highest since 2011.
The company added that client activity remained strong across the franchise.
Net income rose to $5.12 billion for third quarter ended September 30 from $4.45 billion the same time past year. The rate the bank paid on USA interest-bearing deposits was 0.24%, compared with a rock-bottom 0.11% in the prior quarter. Analysts' estimates typically exclude special items.
Global banking revenues increased 5% to $5 billion.
Net interest income increased 9 percent from a year ago to $11.2 billion, reflecting benefits from higher interest rates, as well as loan and deposit growth.
Total revenue grew by 1% to US$22.08bn from US$21.86nm, a year earlier, again beating Wall Street's expectations for US$21.98bn. "Revenue across our four lines of business grew 4 percent, even with a challenging comparable quarter for trading".
BofA's non-interest expenses fell 2.5 percent to $13.14 billion in the third quarter. Net charge-offs increased 1 percent to $900 million, while the netcharge-off ratio declined to 0.39 percent from 0.40 percent.
Net interest income, which makes up about half of the Charlotte, North Carolina-based firm's revenue, rose 1.6% from the previous quarter as the Federal Reserve has raised interest rates three times since December.