Rising interest rates boost Bank of America revenue and profit

The big banks in the United States are taking advantage of the interest rate hikes from the Federal Reserve.

The entities pass on this increase in the price of money in their credits, but they are hardly paying for the deposits to their clients, which is improving the income statements.

The consolidated net profit attributable to Bank of America grew by 16% in the first quarter, up to 7,656 million dollars (close to 7,000 million euros at the current exchange rate), according to the accounts published this Tuesday by the entity.

Bank of America's revenues grew 13%, to $26,258 million, driven by the interest margin, which shot up 25%.

Other income fell, especially due to the 20% drop in investment banking commissions, to about 1.2 billion dollars.

The rise in interest rates is boosting the results of the big banks despite the fact that it was the trigger for the financial turbulence of the last month.

Silicon Valley Bank and Signature Bank fell largely due to the losses suffered in their fixed-income portfolios due to the rate hike.

First Republic also has significant unrealized losses in its mortgage portfolio.

In the cases of these entities, fears for their solvency led to an outflow of deposits.

Some of that money sought refuge in large entities, especially JP Morgan Chase.

However, the lack of attractive remuneration for deposits is also making clients look for alternatives.

In the case of Bank of America, deposits fell by about 30,000 million, 3%, in the first quarter of the year.

The evolution curve shows that the decline was gradual, not the result of a flight due to the financial storm.

Goldman suffers the hiatus

While JP Morgan, Citi, Wells Fargo and Bank of America have exceeded analysts' expectations with good results, Goldman Sachs' profits have fallen 19% in the first quarter, as also published on Tuesday.

The entity obtained 3,087 million dollars of results attributable to its shareholders.

Goldman Sachs is the most dependent on investment banking income and that business continues with very slow activity due to economic and financial uncertainty.

Investment banking revenues fell 26% in the first quarter to $1.578 billion.

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