On Monday, Bank of America posted profit for the third quarter that increased 32% from the same period last year, as an increase in interest rates allowed the bank to charge more for its loans, and lower tax rates for companies helped it to save hundreds of million in taxes.
The banking giants announced that it earned a $7.17 billion profit equal to 66 cents per share. That was up from last year at that same time of $5.42 billion equal to 46 cents per share.
The results beat Wall Street expectations of 62 cents per share.
Like other large banks in the U.S. that already reported earnings, BofA’s results were driven thanks to higher interest rates as well as lower taxes. The bank’s net interest income was 6% higher than the same period last year to over $11.9 billion.
The chairman and CEO of the bank Brian Moynihan said that responsible growth supported by a strong economy and healthy consumer in the U.S. delivered the banks highest pretax earnings for a quarter in company history.
While the bank paid more for its deposits during the quarter, it was more than able to offset that by charging its borrowers more for their loans.
The net interest spread for the bank, which is its difference between how much it pays for its deposits and what it charges for money loaned, widened to just over 2.42% during the quarter.
Consumers attempting to earn interest on savings may want to check elsewhere. BofA paid approximately 0.50% on its deposits that were interest bearing, amongst the lowest of all major banks this quarter.
The bank also paid out significantly lower taxes for the quarter. While the pretax profits at that bank grew by over $1.3 billion during the quarter, the amount the bank set aside for paying taxes dropped by over $300 million.
The corporate and investment division of the bank was strong during the quarter despite revenue from trading being mixed. The division posted a $912 million pretax profit which was up from the previous year of $756 million.
The total revenue at the bank rose to just over $22.78 billion during the quarter which beat Wall Street estimates.
On the news, BofA stock was up 16 cents during trading before the opening bell.