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Bank of America reports higher profits, sees 'solid' US economy

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Bank of America reported higher first-quarter earnings on lower expenses and loan growth Tuesday, with executives describing US growth as still solid.

[NEW YORK] Bank of America reported higher first-quarter earnings on lower expenses and loan growth Tuesday, with executives describing US growth as still solid.

Net profits were US$6.9 billion, up 5.8 per cent from the year-ago level.

Revenues fell by less than one percent to US$23.0 billion.

Earnings rose in consumer banking, the biggest unit by revenue, thanks to increased net interest income following several Federal Reserve interest rate increases and higher loans.

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Profits also were higher in global banking and global wealth and investment management, helping to offset a decline in global markets, where Bank of America was hit by a trading slowdown that has also dented other large banks.

Noninterest expenses fell $618 million. Chief Financial Officer Paul Donofrio described the cuts as "fairly broad-based" and included areas such as marketing, litigation and technology initiatives.

Executives described US growth as "solid," with Mr Donofrio pointing to forecasts that 2019 growth will be in line with the average of the last eight years.

"We have demonstrated for years that Bank of America can grow well in an economy that is just growing moderately, even if it's slowing," Mr Donofrio said.

The bank does not expect a recession in the foreseeable future, but Mr Donofrio said it is well prepared even if one hits.

AFP