Bank of America (BAC) has announced a significant increase in its net income and revenue for the first quarter of 2022, despite experiencing a $20 billion drop in deposits. The company's net interest income rose by an impressive 25%, with its net interest expense also increasing by $12.8 billion from last year to reach $14.2 billion.
By the end of the quarter, total deposits at Bank of America amounted to $1.9 trillion. However, this breaking story reveals that the bank is now expecting less income going forward for every 100 basis point increase in rates.
In Q1 alone, Bank of America saw its revenue jump by 13% to hit $26.3 billion – significantly surpassing analysts' forecasted figures which had predicted earnings closer to around $25.2 billion.
This positive news extends beyond just Bank of America; fellow financial institution Bank of New York Mellon Corp similarly beat first-quarter profit estimates earlier this week, thanks largely due to rate hikes implemented by the Federal Reserve which helped boost their lender's interest income.
Despite witnessing a fall in deposits – dropping by 5% compared with totals recorded at the end of last year – BNY still set aside an additional sum totaling up to around $27 million as provisions for losses; marking a considerable rise from only needing roughly about$2 million allocated towards such precautions just one year prior.
On an adjusted basis for this recent reporting period however, BNY reported profits standing at approximately $1.13 per share overall while simultaneously enjoying considerable growth within their respective net interest incomes spanning across Q1 itself: surging upwards some-62%.
Commenting on these promising results generated amidst turbulent financial times industry-wide over recent months was James Pritchard Jr., senior banking analyst:
Bank earnings will remain a hot topic over the coming days with other major players such as Goldman Sachs and Morgan Stanley set to announce their own respective financial results soon; undoubtedly drawing increased attention from investors keenly watching developments unfold across this crucial industry.