Bank of America profits get a surprise boost as lending surges back above pre-pandemic levels for the first time
Upbeat outlook: Bank of America chief executive Brian Moynihan
Bankof America posted a smaller-than-expected fall in profits as lending surged back above pre-pandemic levels for the first time. Chief executive Brian Moynihan said customers had spent at the highest level ever recorded for the first quarter.
This helped offset a torrid quarter for the group’s investment banking division, where fees slumped by more than a third due to a slowdown in takeovers and stock market floats.
The number of deals rocketed in early 2021 as the global economy began to bounce back from Covid. Total profits fell by 12 per cent to £5billion.
In the first quarter of 2021, Bank of America’s profits were boosted by the release of £2billion it had set aside to cover pandemic-related loan losses that never materialised. In the most recent quarter it released a further £278million.
Moynihan was more upbeat about the banking industry’s outlook than other bosses in the industry.
He said: ‘Could a slowdown in the economy happen? Perhaps. But right now, the size of the economy is bigger than pre-pandemic levels.’