Bank of America 1Q profits rise to record $6.9 billion

NEW YORK (AP) – Bank of America’s profits rose to a record US$6.9 billion last quarter thanks in part to the new tax law and higher interest rates.

The consumer banking giant earned $6.92 billion, or 62 cents per share, up from $5.34 billion, or 45 cents a share, from the same period a year ago. Analysts had been expecting a per-share profit of 59 cents, according to FactSet.

This first-quarter earnings season will give investors and the public their first good look into how President Donald Trump’s tax law is impacting corporate America. Banks are among the first to report results at the beginning of each quarter.

Higher interest rates benefitted the bank as well.

The Federal Reserve has steadily raised interest rates, allowing banks to charge customers more to borrow.

People walk by a branch office of Bank of America in New York. – AP

In Bank of America’s consumer banking division, its largest business by revenue and profit, net interest income rose 13 per cent from a year earlier.

The bank also grew loans and deposits in the quarter.

While higher interest rates should translate into better interest rates for savers, most of the benefits have gone to the banks, not account holders.

Bank of America paid just an average of 0.30 per cent on its interest-earning deposits last quarter, up from 0.09 per cent a year earlier.

Total revenue for Bank of America in the quarter was $23.13 billion, up from $22.25 billion in the same period a year earlier.