Bank of America Q1 2019 results highlight the strength of its retail banking franchise with strong lending and deposits growth.
And the results represent record quarterly earnings.
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Group wide first quarter net income rises by 6% to $7.3bn topping analyst forecasts.
But the stand out metric is the bank’s Consumer Banking division posting a 25% rise in net income to $3.2bn.
Retail banking deposits rise by 3% to $697bn with consumer loans rising by 5%.
Consumer Investment Assets rise by 16% to $211bn.
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By GlobalDataOn the other hand, provision for credit losses increase by $179 to $1.0bn. And the bank’s net charge-off ratio inches up by 3 basis points to 0.43%.
Notably, the bank’s cost-income ratio drops by 3 percentage points to 57%.
Other Bank of America Q1 2019 highlights include strong results at its wealth management unit.
Bank of America Q1 2019 results: wealth management strength
Net income rises by 14% to $1.0bn while its pre-tax margin increases to 29%. Loans and deposits rise by 3% and 8% respectively. Meantime, the bank reports record net new Merrill Lynch client households, up by 85%.
Brian Moynihan, chairman and CEO says: “Our diverse business mix and commitment to responsible growth drove record quarterly earnings. Economic growth and consumer activity in the US continue to be solid. Businesses of every size are borrowing and driving the economy, and asset quality is strong.
“We reduced expenses by 4% from Q1 2018 contributing to the seventeenth consecutive quarter of positive operating leverage. We are well positioned for continued solid results the right way. And we are building on that.”
Bank of America Q1 2019: channel highlights
Active digital banking users rise by 1.5 million from a year ago to 37 million.
Meantime, active mobile banking users rise by almost 10% year-on-year to 27.1 million.
Other notable digital successes include an increase to 27% in digital sales as a percentage of total sales.
In addition, users of the bank’s AI chatbot Erica have increased to 6.3 million.
The Bank of America branch network is down by a net 99 outlets in the past year to 4.353 outlets.
But the bank is investing in the branch channel with new openings. Fifteen new branches have been opened in the past 12 months.
Moynihan adds: “We’ll add 350 financial centres in new and existing markets by 2021. Our network will provide coverage for more than 90% of the US population.”
