Combined spending on credit and debit cards was up 21% to $201 billion in the quarter, the bank said. BofA shares were up nearly 2.5% in trading before the bell. Revenue from its equities division rose 33%, driven by growth in client financing activities and strong trading performance.
Excluding government-backed loans from the pandemic era Paycheck Protection Program (PPP), the bank grew average loans and leases by 2.3% in the third quarter from the prior quarter, although that figure fell 4.3% from last year. Net interest income, a key measure of how much banks make from lending, rose nearly 10% to $11.09 billion.
“We had loan growth in every loan product at the company. It was very broad based,” the bank’s Chief Financial Officer Paul Donofrio said. “We are seeing more spending, we are adding more cards, and payment levels are still very high.” Growth in loans and leases, higher spending on credit and debit cards, and strong equity-trading and M&A activity helped the bank record a 64% rise in earnings, closely mirroring Wednesday’s results of industry bellwether JPMorgan Chase & Co (JPM.N).
Analysts on average had expected a profit of 71 cents per share, according to the IBES estimate from Refinitiv. Reporting by Niket Nishant in Bengaluru and Elizabeth Dilts Marshall in New York; Editing by Anil D’Silva Net income applicable to common shareholders rose to $7.26 billion, or 85 cents per share, for the quarter ended Sept. 30 from $4.44 billion, or 51 cents per share, a year earlier.
Bank of America’s revenue jumped 12% to $22.8 billion. The second-largest U.S. bank by assets released reserves of $1.1 billion in the quarter. It had set aside tens of billions of dollars last year to cover possible loan defaults, which it has steadily been releasing as the economic outlook improves.
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