Helped by the better-than-expected credit quality of its borrowers, Bank of America posted a 12% decline in first-quarter profits from a year earlier, a result that contrast with greater losses posted by its rivals the previous week.
Bank of America results on first quarter exceeded analysts’ estimates.
-Earnings: 80 cents a share vs 75 cents a share estimate.
-Revenue: $23.2 billion vs $23.1 billion estimate
The second-largest U.S. bank earned $7.07 billion, down from $8.05 billion a year earlier. According to analysts the bank was helped by higher net interest income and low exposure to Russian assets.
“First-quarter results were strong despite challenging markets and volatility, which we believe reflect the value of our `Responsible Growth’ strategy,” CFO Alastair Borthwick said in a press release.
Net loan charge-offs (or borrowers that fall behind payments) dropped 52% from a year earlier to $392 million. The bank also posted a $30 million provision for credit losses, far less than the $468 million expected by analysts.
Bank of America was benefited from a strong pickup in lending following a drought caused by pandemic stimulus, however the bank stocks got hammered this year amid concerns on rising inflation, which would lead to higher defaults.