WASHINGTON: Bank of America posted a 40 per cent increase in first-quarter profit, fuelled by stronger trading revenue, and added employees for the first time in more than five years as chief executive Brian Moynihan expressed optimism about the US economy. Fixed-income trading revenue rose 29 per cent to $US2.93 billion ($3.9 billion), beating analysts’ $US2.6 billion average estimate. Equity trading revenue also was better than expected, climbing 7.4 per cent to $US1.1 billion. “The US economy continues to show consumer and business optimism, and our results reflect that,” Moynihan said in the statement. Bank of America added 549 employees in the quarter, the first increase since the third quarter of 2011.
Last week, JPMorgan Chase and Citigroup also reported robust first-quarter revenue from bond trading. JPMorgan, the largest US bank by assets, posted a 17 per cent gain in fixed-income trading revenue, while Citigroup generated the most revenue from that business in three years. That contrasts with Goldman Sachs, which on Tuesday posted worse-than-expected fixed-income results. Bank stocks have climbed since November’s US election in part on expectations that Federal Reserve rate increases would boost profits. Charlotte, North Carolina-based Bank of America, which is among the most sensitive to interest-rate changes, has led the surge among the country’s biggest lenders, gaining 38 per cent through Monday.
