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In the third quarter of 2024, Bank of America (NYSE: BAC) reported a net income of $6.9 billion, or $0.81 per diluted share, compared to $7.8 billion, or $0.90 per diluted share, in the same period last year. The bank’s total revenue, net of interest expense, was $25.3 billion, showing a slight increase from $25.2 billion in the previous year.

This growth was primarily driven by higher asset management and investment banking fees, as well as increased sales and trading revenue, despite a decrease in net interest income. The Consumer Banking segment reported a net income of $2.7 billion, with revenue declining by 1% to $10.4 billion due to lower net interest income, which was partially offset by higher card income. The segment saw a decrease in average deposits by 4% from the previous year but experienced a 3% increase in combined credit and debit card spend, reaching $232 billion.

Additionally, consumer investment assets hit a record $497 billion, up 28% from the previous year. Global Wealth and Investment Management posted a net income of $1.1 billion, with revenue increasing by 8% to $5.8 billion. This growth was attributed to a 14% rise in asset management fees, driven by higher market levels and strong asset under management (AUM) flows. Client balances reached a record $4.2 trillion, up 18% from the previous year, bolstered by higher market valuations and positive net client flows.

Bank of America Outperforms Expectations in Third Quarter of 2024

Bank of America’s performance in the third quarter exceeded market expectations, with earnings per share (EPS) of $0.81 surpassing the anticipated $0.76. The bank’s revenue of $25.3 billion also slightly exceeded the forecast of $25.25 billion. This positive outcome was largely due to robust fee growth in investment banking and asset management, which compensated for the decline in net interest income.

The Global Banking segment saw a 6% decrease in revenue to $5.8 billion, primarily due to lower net interest income. Despite this, the segment achieved an 18% increase in total investment banking fees, maintaining its position as the third-ranked investment bank in terms of fees. Average deposits in this segment increased by 9%, demonstrating strong client engagement and growth in the bank’s deposit base.

Global Markets reported a net income of $1.5 billion, with revenue rising by 14% to $5.6 billion. This was driven by higher sales and trading revenue, which increased by 12%, and significant growth in equities revenue, which rose by 18%. The segment also reported zero days of trading losses year-to-date, highlighting its strong risk management and trading performance.

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Guidance and Future Outlook

Bank of America remains optimistic about its future performance, despite the challenges posed by the current economic environment. The bank’s CEO, Brian Moynihan, emphasized the company’s focus on driving growth through investments in its business and leveraging its diverse business model to deepen client relationships.

The bank plans to continue its strategic investments in technology and talent to enhance its competitive position and deliver long-term value to shareholders. The bank’s strong capital position, with a Common Equity Tier 1 (CET1) ratio of 11.8%, provides a solid foundation for future growth and enables it to return capital to shareholders.

During the quarter, Bank of America returned $5.6 billion to shareholders through dividends and share repurchases, demonstrating its commitment to delivering shareholder value. Bank of America also highlighted its focus on maintaining strong asset quality, with a provision for credit losses of $1.5 billion, which remained flat compared to the previous quarter.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.