Bank of America Corp.’s (BAC.N) first-quarter profit rose as customers’ interest payments increased while the Federal Reserve raised borrowing costs.
In the first quarter, JPMorgan Chase & Co. (JPM.N) and Citigroup Inc. (C.N) also profited from higher interest payments while setting away billions to brace for a weaker economy.
“Results were strong despite a challenging economic environment with market and banking sector volatility,” Bank of America CFO Alastair Borthwick said on Tuesday.
The results boosted the company’s premarket shares by 3%.
In March, two U.S. lenders collapsed, raising recession fears. As a result, Bank stocks plummeted as frightened depositors moved their money to bigger banks.
BofA deposits declined 2% to $1.05 trillion in the first quarter from the fourth quarter.
At $1.2 billion, investment banking fees dropped 20%.
BofA earned $3.5 billion from fixed-income, currency, and commodity traders, up 27% from a year earlier.
Net interest income, the bank’s revenue from charging customers interest, jumped 25% to $14.4 billion in the quarter.
Two U.S. lenders failed in March, shaking the banking industry. Bank stocks plummeted as scared depositors moved their money to bigger banks.
The second-largest U.S. lender stated Tuesday that net income applicable to common shareholders grew to $7.66 billion, or 94 cents per share, for the three months that ended March 31. Last year, compared to $6.6 billion, or 80 cents per share.
