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Bank of America’s first-quarter profits fell by almost a fifth as the country’s second-largest bank was hit by losses tied to office loans and credit cards.
Profits fell to $6.7bn in the first three months of the year from $8.2bn a year earlier, the Charlotte-based lender said on Tuesday. Revenues in the period slipped to just under $26bn.
The bank wrote off $1.5bn worth of loans in the first quarter, with $500mn of that tied to the struggling office market. At the same time, consumer loan losses, including on credit cards, more than doubled from a year ago to $1bn.
Results at BofA, like its large competitors, were also dragged down by costs tied to last year’s regional banking crisis after the Federal Deposit Insurance Corp imposed another round of fees on the nation’s largest banks to rebuild its depleted deposit insurance fund.
Alastair Borthwick, the bank’s chief financial officer, called loan growth “sluggish”.
Shares in BofA were volatile in pre-market trading.
The bank’s performance during the first quarter was helped by a rebound in dealmaking that also buoyed Wall Street rivals. BofA’s investment banking revenues rose 35 per cent from a year earlier, faster than expected, and the bank said that it gained market share on rivals.
The lender said its Wall Street sales and trading businesses enjoyed its best start to the year in more than a decade.
“We reported a strong quarter as our businesses performed well, adding clients and deepening relationships,” said BofA chief executive Brian Moynihan. “Continued strong earnings and strong expense management both position our company to continue to drive our market-leading positions across our businesses.”