Shares of Bank of America (NYSE:BAC) are up roughly 1.5% in pre-open Monday after the company reported better-than-expected Q1 revenue excluding DVA.
The bank reported EPS of 80c in the first quarter, topping the consensus estimates of 75c per share. Revenue came in at $23.23 billion, just above the analysts’ expectations of $23.18 billion.
“First quarter results were strong despite challenging markets and volatility,” Chief Financial Officer Alastair Borthwick said in a statement. “Going forward, and with the forward curve expectation of rising interest rates, we anticipate realizing more of the benefit of our deposit franchise.”
Trading revenue excluding DVA stood at $4.72 billion in the period, above the analyst consensus of $4.25 billion. FICC trading revenue excluding DVA was reported at $2.71 billion, beating the estimates of $2.66 billion.
Equities trading revenue excluding DVA totaled $2.01 billion, above the expected $1.58 billion. BofA reported a net interest income FTE of $11.68 billion, missing the consensus projection of $11.72 billion. Investment banking revenue came in at $1.46 billion, short of the consensus estimates of $1.67 billion.
Wealth & investment management total revenue stood at $5.48 billion in the period, beating the estimated $5.43 billion. The bank reported a return on average equity of 11%, above the expected 10.1%.
Return on average assets was 0.89%, beating the expected 0.82%, while return on tangible common equity hit 15.5%, also above estimates of 14.2%. The bank reported compensation expenses of $9.48 billion, beating the estimated $9.43 billion.
BofA said strong Q1 results were driven by robust client activity, despite market volatility and challenges. BAC also noted a very small direct exposure to Russia-based companies.
Goldman Sachs analyst Richard Ramsden said BAC delivered “good enough” results that came as a result of “much less of a capital hit than peers.”
“We believe the market will view these results positively, and based on peers that have reported so far, the focus is likely to primarily be on the NII outlook, in terms of the steeper rate curve and the strong loan growth backdrop, how they managed their capital base, despite $6.8bn of AOCI pressure, and the outlook for capital return from here.”
By Senad Karaahmetovic