Bank of America, the second-largest U.S. bank by assets, reported on Oct. 15 a 23% rise in third-quarter profit. BofA's results were largely driven by a rebound in investment banking activity associated with the long-awaited recovery of the mergers and acquisitions (M&A) market, Bloomberg notes.

The bank's profit reached $8.5 billion or $1.06 per share and exceeded expectations. The Wall Street consensus forecast was for $0.95 per share, CNBC cited LSEG data.

BofA's revenue rose 11% year-over-year to $28.1 billion, also beating analysts' estimates of $27.5 billion.

Investment banking revenue jumped 43% to $2.05 billion. M&A advisory fees brought in 51% more than last year's third quarter at $583 million, while equity and debt offerings were up 34% and 42%, respectively.

Bank of America also reported that net interest income (NII) - one of its key revenue sources - soared 9.1% to $15.2 billion, while analysts had expected a rise of only 7.6%. The figure reflects the difference between loan income and deposit payments. Bank CEO Brian Moynihan called it a record high.

BofA shares jumped 4.8% in the premarket on Oct. 15. Since the beginning of the year, they are up about 14%, while the S&P 500 Financials core index is up only 10%.

Context

BofA's results followed strong data from other major U.S. banks - JPMorgan, Wells Fargo, Citigroup and Goldman Sachs - that opened the reporting season on Tuesday. All four giants beat Wall Street expectations on revenue and profit thanks to a rebound in investment banking activity in the third quarter. Investment bank chiefs also reported that the U.S. economy remained resilient, though they warned of lingering risks.

Cumulatively, the banking giants' reports showed solid consumer finance and strong growth in the investment banking and securities trading segments - key areas of Wall Street, Barron's noted .

The news is supplemented.

This article was AI-translated and verified by a human editor

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