Bank of America shares fall in surplus gains. What you need to know.

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bank of america

posted strong first-quarter results on Thursday, but equities fell as investors focused on the bank’s Covid-19-related spending and net interest income and loan growth weaker than was expected.

Revenue at Bank of America (scoreboard: BAC) more than doubled from a year ago to $ 8.1 billion, up from $ 4 billion in the first quarter of last year. The bank earned 86 cents per share on $ 22.8 billion in sales, surpassing analysts ’expectations of 66 cents per share revenue for $ 21.9 billion in revenue.

Shares fell 4% in recent trading, to $ 38.28, after advancing to 1.2% premarket. He

S&P 500

rose 0.7%.

I like

JPMorgan Chase

(JPM) i

Wells Fargo

(WFC), which reported earlier in the week, Bank of America’s results were helped by the improved economic environment and the release of reserves accumulated last year to cover possible loan losses. The bank released $ 2.7 billion from its reserves, compared to the sum of $ 3.6 billion at this time last year.

But while the economic context is much better than feared, customers are still not taking out loans. Bank of America saw its consumer bank revenue fall by $ 1.1 billion, to $ 8.1 billion, due to the impact of lower interest rates and loan balances.

Net interest income was $ 10.2 billion, down from $ 12.1 billion in the previous quarter as the bank, like its peers, continues to be hit by low interest rates, which are falling the difference between what banks earn on loans and pay on deposits. .

“While low interest rates continued to challenge income, credit costs improved and we believe that progress in the health and economic crisis points to an accelerated recovery,” CEO Brian said. Moynihan in a statement.

Weaker net interest income was offset by a 19% increase in interest-free income, which rose to $ 12.6 billion, thanks to strong capital markets and investment banking. Bank of America noted record investment investment fees of $ 2.2 billion and equity subscription fees of $ 900 million, which rose 218%. Meanwhile, fixed income trade rose 22% to $ 3.3 billion, while equity trade rose 10% to $ 1.8 billion.

The bank also saw interest-free spending rise 15%, to $ 15.5 billion, due to the high cost of Covid-19 and compensation.

Citigroup

(C) also reported results Thursday, while

Morgan Stanley (EM)

reports Friday. JPMorgan Chase,

Goldman Sachs

Group (GS) and Wells Fargo began banking profits on Wednesday.

Write to Carleton English at [email protected]