Bank of America Profits Defy Expectations Despite Increased Deposit Costs

Bank of America's third-quarter profits exceeded forecasts despite increased payouts to depositors. Investment banking and trading powered earnings beyond expectations. CEO Brian Moynihan noted growth in investment banking, asset management, and sales. The bank anticipates a rise in net interest income and has benefited from improved client sentiment and market conditions.

Bank of America's third-quarter profit exceeded analyst expectations, as boosted investment banking and trading offset the increased costs of customer deposits. Despite these higher payouts, BofA's earnings mirrored positive trends seen in other financial giants like JPMorgan, Goldman Sachs, and Citigroup, reflecting better conditions for dealmaking with improved client sentiment.

The bank's investment banking fees surged 18% year-over-year to $1.4 billion, driven by a wave of client confidence leading to more debt and equity issues. Chief Financial Officer Alastair Borthwick remains optimistic about future growth, highlighting healthy customer deposit balances and asset quality.

CEO Brian Moynihan praised the solid earnings, citing gains across investment banking, asset management, and trading revenues. With mergers and acquisitions on the rise, BofA's advisory fees also saw a boost. The bank attributes its continued success to buoyant market conditions and strategic reactions to federal rate changes.

(With inputs from agencies.)