Bank of America tops estimates on better-than-expected trading revenue

Bank of America topped analyst estimates for third-quarter profit and revenue on better-than-expected trading results.

Here’s what the company reported:

• Earnings: 81 cents vs. 77 cents LSEG estimate
• 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 a share, on higher provisions for loan losses and rising expenses.

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

Fixed income trading revenue rose 8% to $2.9 billion, topping the $2.74 billion estimate, on strength in currencies and interest rate activity. Equities trading jumped 18% to $2 billion, topping the $1.81 billion estimate, on higher cash and derivative volumes.

Investment banking fees also jumped 18% to $1.40 billion, topping the $1.27 billion estimate.

The bank’s provision for credit losses of $1.5 billion, while up from $1.2 billion a year earlier, was slightly under the $1.57 billion estimate.

Shares of the bank climbed about 1% in premarket trading.

Net interest income fell 2.9% to $14.1 billion, edging out the $14.06 billion estimate. The lender signaled in July that a rebound in net interest income was coming in the second half of this year.

Bank of America has seen its haul from net interest income get compressed as the Federal Reserve boosted rates over the past two years. Now that the Fed is easing rates, analysts will be keen to understand how that will impact the bank.

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

JPMorgan Chase and Wells Fargo on Friday posted earnings that topped estimates, helped by their investment banking operations. Goldman Sachs and Citigroup are also scheduled to report results Tuesday, while Morgan Stanley will disclose earnings Wednesday.

This story is developing. Please check back for updates.