Results from the financial sector have been mixed this quarter but Bank of America (NYSE:BAC) stands out.
Results from the financial sector have been mixed this quarter but Bank of America (NYSE:BAC) stands out. The company’s focus on U.S. consumer banking and the interest rate environment has it set up for earnings growth and that is already being seen in the results. The company reported its Q1 earnings and beat the consensus by more than 500 basis points on strength in net interest income. Net interest income is being driven by continued growth in both loans and deposits and supported by what appears to be a relatively healthy consumer, as well as rising interest rates. Q1 2022 hedge fund letters, conferences and more « Net interest income increased by $1.4B versus the year-ago quarter supported by strong loan and deposit growth, » said Chief Financial Officer Alastair Borthwick. Going forward, and with the forward curve expectation of rising interest rates, we anticipate realizing more of the benefit of our deposit franchise. The financial sector and Bank of America entered correction on fears of inflation, slowing growth, and a weakened consumer but so far those fears have not played out. Bank of America’s Q1 results are strong enough that the market is putting in a bottom and it is one we think will result in a reversal.
