Bank of America (BAC) earnings in the third quarter of 2024

bank of america beat analyst estimates for third-quarter earnings and revenue thanks to better-than-expected business results.

This is what the company reported:

• Earnings: 81 cents vs. 77 cents estimated by LSEG
• Revenue: $25.49 billion vs. $25.3 billion estimate

The bank said Tuesday that net income fell 12% from a year earlier to $6.9 billion, or 81 cents per share, due to higher provisions for credit losses and higher expenses.

Revenue rose less than 1% to $25.49 billion, as gains in trading income, asset management and investment banking fees offset a decline in net interest income.

The bank’s shares rose about 2%.

Bank of America, led by CEO Brian Moynihan since 2010, demonstrated the advantages of having a huge, diversified financial institution. Analysts have focused on the bank’s core business, which is taking deposits and lending to consumers and corporations, as rising rates have reduced the company’s interest income.

But the quarter showed that the bank also benefits from growing activity on Wall Street through its trading and advisory operations, as do its rivals. JPMorgan Chase and Goldman Sachs did.

Fixed income trading revenue rose 8% to $2.9 billion, beating StreetAccount’s estimate of $2.74 billion, thanks to strong currencies and interest rate activity. Equity trading rose 18% to $2 billion, beating StreetAccount’s estimate of $1.81 billion, thanks to higher cash and derivatives volumes.

Investment banking fees also rose 18% to $1.4 billion, beating StreetAccount’s estimate of $1.27 billion.

While net interest income fell 2.9% from a year earlier to $14.1 billion, that beat StreetAccount’s estimate of $14.06 billion.

That NII figure in the third quarter was higher than in the second quarter, a sign that the trajectory of this key metric is improving. The lender said in July that a rebound in net interest income would occur in the second half of the year.

Bank of America “appears to be turning around the NII inflection,” although the degree depends on interest rates going forward, Wells Fargo analyst Mike Mayo said in a note Tuesday.

NII, which is one of the key ways banks make money, is the difference between what a bank earns on loans and investments and what it pays depositors for their savings.

The bank’s provision for credit losses in the quarter of $1.5 billion was slightly below the estimate of $1.57 billion.

JPMorgan Chase and Wells Fargo on Friday posted earnings that beat estimates, helped by their investment banking operations. Goldman Sachs and citi group also reported results on Tuesday, while Morgan Stanley will release its results on Wednesday.