Shares of Bank of America (BAC) are off 23 cents, or 1%, at $19.25, after the company this morning announced Q1 revenue fell 11% to $31.97 billion, easily beating the $27.97 billion expected, yielding profit per share of 28 cents, a full 19 cents better than expected.
Seems fair to say the surprise on the top line is not going to be taken as being of extremely high quality, given that some chunk of it relates to accounting technicalities.
Net interest income dropped by 10% even though on a reported basis it increased. That’s because an accounting change made B of A move $100 billion in assets onto the books.
Interest income was hit by loan demand decreasing and by a rise in charge-offs. Net charge-offs were 4.4% of the company’s loan losses, up from 3.7% in Q4, though the company’s provision for credit losses declined quarter over quarter.
Credit quality improved, however, as net charge-offs “declined across a broad range of borrowers and industries,” the company said.
Revenue, which fell year over year but was up 27% from Q4, was helped by a 2% rise, roughly $15.2 billion, in average retail deposits, led by momentum in Merrill Lynch’s well-heeled customers, the company said.
Global wealth management’s revenue rose 1.4%, year over year, to $4.41 billion, and global banking revenue rose 10%.
CEO Brian Moynihan was on CNBC this morning, stating that the company needs to see more stability in the economy before raising the dividend. And that could take multiple quarters to assess, he indicated.
BAC’s conference call with analysts is starting now; you can listen to it here.
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