Bank of America has reported a 15% growth in profits for the last quarter, joining other big banks that have done well this earnings season as investors and consumers seek safety on Wall Street following the failure of Silicon Valley Bank and Signature Bank. BofA’s profits rose to $8.2 billion, up from $7.1 billion in the same period last year. The bank has seen an influx of wealthy clients, businesses, and other customers seeking a safe haven after the recent bank failures, and like other big banks, it is seen as having an implicit government backstop due to its “too big to fail” status. BofA’s net interest income rose 25% to $14.4 billion in the quarter, driven by higher interest rates that have allowed the bank to charge more for customers to borrow.
However, the bank is also paying more to depositors as it competes to keep deposits, and it set aside roughly $930 million to cover potentially bad loans in the quarter. Despite these challenges, BofA remains confident as charge-offs remain below pre-pandemic levels. The bank’s shares rose 2% in premarket trading on Tuesday.
