Bank of America posts Q3 profit of USD 6.7 billion   

Oct 15 (Lagos) - Bank of America reported 43% increase in its third quarter earnings per share of 66 cents year on year this morning in USA. Total loans grew by 3% yoy to USD 930 billion, a figure that disappointed analysts who expected a higher loan growth number. Deposits grew by 4% with strong growth in the checking accounts deposits.  

Profit after tax rose to $ 6.7 billion in Q3 from $ 5 billion in the same period one year ago. 

The cost of revenue ratio for Bank of America was 59% which was slightly above the same ratio of JP Morgan and Citigroup. 

The shares of Bank of America were down by more than 1% in afternoon trading as analysts were not happy with the growth and investment banking performance at Bank of America particularly in Bond trading.

In our opinion "the analysts are failing to see value in this stock because the Bank continued to buy back shares in the quarter and reduce its shares outstanding thereby boosting earnings per share. Dividend is being raised regularly now and can be raised again. Interest rates are rising which already gave a big boost to earnings in this quarter. The stock offers decent value at current prices along with the dividend income."

Bank of America has returned USD 19 billion this year to its shareholders in the form of dividends (4 billion) and share buy backs (15 billion). 

Total expenses for the third quarter came in at USD 13.07 billion. The total expenses for full year are expected to be USD 53.5 billion. 

reporting for on Monday, October 15 2018 from Lagos, Nigeria
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