(Businesshala) – Bank of America Corp beat estimates for third-quarter profit on Thursday, boosted by the release of reserves set aside last year and growth in its consumer banking division.
Net income applicable to common shareholders rose to $7.26 billion, or 85 cents per share, for the quarter ended September 30, from $4.44 billion, or 51 cents per share, a year ago.
Analysts had expected an average profit of 71 cents per share, according to Refinitiv’s IBES estimate.
Bank of America, the second largest US bank by assets, issued reserves of $1.1 billion in the quarter. The bank last year set aside tens of billions of dollars to cover potential loan defaults, which it continues to release as the economic outlook improves.
Because of the structure of its balance sheet, BofA is most sensitive to changes in interest rates at large US banks.
The Federal Reserve’s move to keep the benchmark rate close to zero last year as a way to counter the economic fallout of the pandemic has been a pressure on lenders to reduce interest received on loans and interest paid on deposits for a principal depends on the difference between share of its revenue.
Bank of America’s revenue jumped 12% to $22.8 billion.