Bank of America (BAC) 2021 Q1 Financial Results Preview

Bank of America Corp (NYSE:BAC) traces its roots back to 1904 when an Italian immigrant, named Amadeo Giannini, established the Bank of Italy in San Francisco. His bank started offering loans to immigrants, working-class Americans, and farmers, who were usually refused by major financial institutions of that time. Over the years, the bank grew by expansion and acquisitions.

Some of the notable acquisitions include Merrill Lynch, Countrywide Financial, LaSalle Bank Corp, and FleetBoston Financial Corp. Today, Bank of America is one of the world’s biggest financial institutions, offering a suite of financial services to individuals, small businesses, and big enterprises.

BAC recently announced strong profit for the first quarter, partly helped by solid growth in capital markets. The bank reported earnings of $8.1 billion, or 86 cents per share for the three months ended March 31, well above $4.0 billion, or 40 cents per share in the comparable quarter of 2020. Analysts on average were looking for earnings of 66 cents per share.

Revenue for the quarter came in at $22.8 billion, as compared to the consensus forecast of $21.90 billion. Meanwhile, net interest income fell 15.9 percent to $10.20 billion, and missed the consensus estimate of $10.27 billion.

If we look at the performance of key segments, revenue at the consumer banking segment decreased 12 percent to $8.1 billion, primarily due to lower interest rates. On the bright side, revenue at the global markets segment jumped 19 percent to $6.2 billion.

CEO Brian Moynihan expressed his satisfaction over the results. He said in a statement, “”Our team produced exceptional results this quarter: record or near-record levels of deposits, investment flows, investment banking revenue, digital users and client engagement. Meanwhile, brand loyalty, customer satisfaction and employee engagement reached new highs. While low interest rates continued to challenge revenue, credit costs improved and we believe that progress in the health crisis and the economy point to an accelerating recovery.”

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