Things are looking far different for Bank of America compared to a few years back.
And while the prospect of more interest rate hikes and a recent decline in treasury yields might concern some, Bank of America’s CEO is reportedly confident in both his company and the current health of the U.S. economy.
The Charlotte, N.C.-based bank recently beat out expectations in its Q1 2017 earnings report. Announced on Tuesday, Bank of America reported that quarterly profits rose 40 percent year over year to $4.86 billion from $3.47 billion a year ago.
Likewise, earnings per share beat out analysts’ expectations of $0.35 by hitting $0.41. Likewise, Bank of America reported that its revenue hit $22.25 billion in Q1, up from $20.79 billion in the same period last year.
CEO Brian Moynihan attributed Bank of America’s success to its focus on what he calls “responsible growth,” a push to simplify the bank’s operations and focus on stability. He noted in the earnings release that the quarterly results reflect growing consumer and business optimism.
“Our approach to responsible growth delivered strong results again this quarter. Revenue was up 7 percent and EPS grew 46 percent. We saw good client activity in our balanced portfolio of businesses,” Moynihan said.
“Consumer spending was up, our wealth management business had strong asset management flows, investment banking fees rebounded nicely,” Moynihan said, “and we continued to provide credit and capital to our corporate and institutional clients to help them drive the economy forward.”
In an interview with Barron’s, Moynihan noted that he expects the Federal Reserve to raise interest rates twice more in 2017 — which isn’t a problem for Bank of America, since a large portion of its deposits are in non-interest-bearing checking accounts.
Likewise, while Treasury yields have been in decline as of late, Moynihan told Barron’s that “the underlying economy is what we have to worry about — and the underlying economy is fine.”