(Reuters) -Bank of America Corp beat estimates for third-quarter profit on Thursday boosted by the release of reserves that were set aside last year and growth in its consumer banking division.
Net income applicable to common shareholders rose to $7.26 billion, or 85 cents per share, for the quarter ended Sept. 30 from $4.44 billion, or 51 cents per share, a year earlier.
Analysts on average had expected a profit of 71 cents per share, according to the IBES estimate from Refinitiv.
Bank of America, the second-largest U.S. bank by assets, released $1.1 billion of reserves in the quarter. The bank set aside tens of billions of dollars last year to cover possible loan defaults, which it has steadily been releasing as the economic outlook improved.
Because of the composition of its balance sheet, BofA is most sensitive among large U.S. banks to changes in interest rates.
The Federal Reserve’s move last year to keep benchmark rate to near zero as a way to counter the economic fallout of the pandemic has been a drag on lenders, which rely on the difference between interest received on loans and interest paid out on deposits for a major portion of its revenue.
Bank of America’s revenue jumped 12% to $22.8 billion.
(Reporting by Niket Nishant in Bengaluru and Elizabeth Dilts Marshall in New York; Editing by Anil D’Silva)
