Bank of America Q3 2019 beat forecasts boosted by impressive retail banking metrics.
For the quarter to end September, Bank of America posts net income of $5.8bn.
But this represents a 19% fall from the year ago quarter (Q318: $7.2bn) following an impairment of $1.7bn.
Revenue, net of interest expense, increases modestly to $22.8bn reflecting both higher investment banking fees and net interest income. On the other hand, this is partially offset by an equity investment gain in the prior-year period.
Bank of America Q3 2019: retail banking highlights
The bank’s consumer banking unit posts net income up by 5.3% year-over-year to $3.3bn. Loans rise by 7% to $304bn with deposits ahead by 3% y-o-y to $709bn. Consumer investment assets rise by 9% to $223bn with flows of $23bn.
Consumer banking revenue rises by 3% to $9.7bn. This is driven primarily by increased net interest income due to growth in deposits and loans.
Meantime, successful cost control results in a cost-income ratio of 45% at its retail banking unit.
Other less positive metrics include a 5% y-o-y rise in provisions for credit losses to $917m.
But the $1.7bn impairment hits the group cost-income ratio, up by 10 percentage points to 67%.
Group wide, average deposit balances rise by 4% or $59bn to $1.4trn.
Other group highlights include an 8% rise in net income to $1.1bn at the bank’s global wealth unit.
Bank of America Q3 2019: channel highlights
Bank of America ends the quarter with 4,302 branches down by a net 83 outlets from 4,385 a year ago. The current branch estate includes 20 new openings and 117 branch renovations.
Notably, active digital banking customers are up by 5% or 1.8 million to 38 million.
Meantime, active mobile banking customer numbers grow by 11% from 25.9 million to 28.7 million.
Over the same period, total log ins to the mobile banking app rise by 14% to 1.6 billion.
Moreover, 26% of all consumer banking sales are now conducted digitally, up from 23 a year ago. For example, 40% of total consumer mortgage applications come from digital; channels from just 20% a year ago.
For the year to date Bank of America’s share price is up by 20.4%.