Bank of America (NYSE: BAC) reported financial results for the third quarter of 2024, recording net income of $6.9 billion, or $0.81 per share. Total revenue was $25.3 billion, up $178 million from the same period last year. The company announced that the increase in revenues was due to solid growth in asset management fees and investment banking, as well as strong performance in sales and trading.
画像出典: UnsplashのDmitry Kropachevが撮影
Consumer Banking Division
The Consumer Banking Division recorded net income of $2.7 billion and revenues of $10.4 billion. Revenues declined 1% YoY, primarily due to lower net interest income (NII). On the other hand, the increase in credit card revenues was partially offset. Average deposits of $938 billion declined 4% YoY, but are up 30% from pre-pandemic levels (Q4 2019). Average loan balances increased 1% y/y to $313.8 billion. Total credit/debit card spending was $232 billion, up 3%. New consumer checking accounts increased by approximately 360,000, representing record growth.
Global Wealth and Investment Management Division
Global Wealth and Investment Management recorded net income of $1.1 billion and revenues of $5.8 billion. Revenue increased 8% y/y, driven by a 14% increase in asset management fees and a $2.1 billion increase in AUM (assets under management). Client balances of $4.2 trillion increased 18% y/y. Approximately 5,500 new relationships were established through Merrill and Private Bank.
Global Banking Division
Global Banking recorded net income of $1.9 billion and revenues of $5.8 billion. Revenues were down 6% y/y, primarily due to lower net interest income. Investment banking fees of $1.4 billion were up 18% y/y, maintaining the third place ranking in investment banking fees. Average deposits increased 9% to $550 billion, while average loans to small businesses increased 5%.
Global Markets Division
The Global Markets division recorded net income of $1.5 billion and revenues of $5.6 billion. Revenues were up 14% y/y, led by a 12% increase in sales and trading revenues. Fixed Income, Currency, and Commodities (FICC) revenues increased 8% to $2.9 billion and Equities revenues increased 18% to $2.0 billion. Cash flow from operations was strong at $14 billion, 2.2 times net income. There were zero loss days for digital transactions.
Other Divisions
The Other division reported a net loss of $295 million. The main cause was an increase in Visa’s litigation-related escrow account. Non-interest expense was $200 million, down from the same period last year, with cost reductions related to the liquefaction business contributing.
Balance Sheet and Capital Situation
The balance sheet was solid, with average deposits of $1.92 trillion, up 2% y/y. Average loans outstanding were $1.06 trillion, up 1%. Long-term debt increased YoY to $296.9 billion, while liquidity sources remained strong at $947 billion. The Common Equity Tier 1 (CET1) capital ratio was 11.8%, 112 basis points above the new regulatory minimum. Returns to shareholders totaled $5.6 billion in dividends and share buybacks; book value per share was $35.37, up 8% from the same period last year, and real book value was $26.257, up 10%.
Credit Quality
In credit quality, credit loss provisions totaled $1.542 billion, up $34 million from the same period last year. Net charge-offs were $1.534 billion, essentially unchanged from the same period last year. Non-performance loans and leases amounted to $5.629 billion, 0.53% y/y. Loan and lease reserve ratio remained steady at 1.24%.
CEO and CFO Comments
CEO Brian Moynihan commented, “We delivered solid earnings, with average loan growth and deposit growth for the fifth consecutive quarter. double-digit growth in investment banking and asset management fees, along with NII growth, boosted earnings. We continue to invest in our business and move the company forward in all environments.”
CFO Alastair Borthwick said, “The team’s efforts have helped our clients grow and improve their balance sheets. Liquidity is strong, our capital base exceeded new regulatory requirements, and we were able to return $5.6 billion to shareholders. Our diversified business model is a strength and we are deepening existing client relationships and building new ones.”
Bank of America maintained solid performance in the third quarter of 2024, posting year-over-year growth in both revenue and net income. In particular, strong performance in investment banking and asset management drove revenue growth, while the balance sheet as a whole remained solid. The company expects the promotion of digitalization and the strengthening of client services to be the foundation for future growth.
