Buoyant consumer banking activity drove Bank of America’s profits up sharply in the third quarter.
The US bank’s profits swelled nearly $3bn over the last year, climbing to around $7.7bn in the last three months.
Profits were primarily driven by the strong performance of its consumer banking arm, which registered a more than $1bn jump in net income over the last year.
Customer deposits topped $1 trillion for the first time ever, up 16 per cent.
The American banking giant’s bottom line received a bump from the release of $1.1bn in loan reserves set aside to cope with an expected wave of defaults triggered by the Covid-19 crisis.
Bank of America’s wealth and investment division notched its best ever quarter, reaping in $1.2bn in profits.
Earnings per share, a key measure of a firm’s profitability, hit 85 cents, above analysts’ expectations. Its common equity tier one ratio stood at 11.1 per cent.
Brian Moynihan, chairman and chief executive of Bank of America, said: “Each day clients entrust us with more of their business, whether it’s new checking and credit card accounts in Consumer; broader and deeper relationships in Wealth Management; increased commercial loan balances; or nearrecord investment banking activities.”
“Our institutional clients also relied on us to help them manage risk through our market-leading sales and trading capabilities, where we had strong revenues this quarter.”