Analyzing Bank of America’s Revenues in Q1

Bank of America (BAC) posted total revenues, net of the interest expense, of $23.0 billion. The revenues were roughly flat compared to the same period in 2018. However, the revenues missed analysts’ estimate of $23.3 billion. Benefits from the higher net interest income were offset by lower non-interest income.

Citigroup (C) also missed analysts’ revenue estimate in the first quarter. Citigroup reported a 2% YoY decline, which reflected lower revenues from the equity market. Goldman Sachs’ (GS) first-quarter revenues decreased 13%, which reflected lower revenues from equity underwriting and interest rate products. Wells Fargo (WFC) beat analysts’ expectation. However, lower credit offtake and a decline in deposits remained a drag.

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JPMorgan Chase (JPM) had a strong sales performance in the first quarter. Growth in loans and deposits, higher rates, and an increase in investment banking fees drove the bank’s better-than-expected first-quarter revenues.

The revenues in the Consumer Banking segment rose 7% on a YoY basis to $9.6 billion, which reflected higher net interest income. Higher interest rates and growth in lending and deposits drove the net interest income in the first quarter. The segment’s average loans grew 5%, while the deposits increased 3%.

Bank of America’s revenues in the Global Wealth & Investment Management segment decreased 1% to $4.8 billion. The benefits from the higher net interest income were more than offset by lower asset management fees. A decline in transactional revenues and lower market valuations dragged the asset management fees down.

The Global Banking segment’s revenues increased 3% to $5.2 billion driven by growth in loans and deposits and an increase in leasing related revenues. However, loan spread compression had a negative impact on the revenue growth rate.

The revenues in the Global Markets segment fell 13% to $4.2 billion. Excluding the net debt valuation adjustment, the revenues decreased 10%, which reflected lower trading revenues and lower investment banking fees.