UPDATE: The following story, originally published at 7:10 a.m. on Tuesday, April 18, 2017, has been updated with executive comments and market performance.
Bank of America (BAC) posted higher quarterly profit than analysts estimated as bond-trading revenue surged during the early months of Donald Trump's presidency and investors sought to protect their wealth from turmoil in the European Union.
Profit of 41 cents a share in the three months through March compared with the 35-cent average estimate from analysts surveyed by Bloomberg. Net income climbed 40% to $4.9 billion, the Charlotte, N.C.-based lender said in a statement.
"Not many companies have the sources we have to help our clients drive the global economy," said CEO Brian Moynihan, who succeeded Ken Lewis in 2010 after the bank repaid a $45 billion financial-crisis bailout. "But with that, we understand responsibility comes with doing this, and we do it in a responsible way," he told analysts on an earnings call.
Revenue from trading bonds, currencies and interest-rate swaps surged 17% to $2.81 billion, a gain that was in line with Citigroup (C) , which posted an increase of 19%, and JPMorgan Chase, (JPM) which garnered 17% more than a year ago.
Credit Suisse Analyst Susan Roth Katzke had predicted fixed-income trading at the five biggest Wall Street firms might rise as much as 28% in the quarter before Goldman Sachs (GS) posted growth of 1% Tuesday that not only missed her estimated gain of 11% but lagged sharply behind rivals.
In addition to Trump's presidency, major banks have benefited from speculation about how Britain's departure from the European Union will affect international trade -- debate that heightened Tuesday as Prime Minister Theresa May called for an early election that will gauge support for the move.
At the same time, concern about what a victory by nationalist candidate Marine Le Pen in the French presidential race would mean for that country's EU membership is driving trades. The two nations are among the three biggest European economies.
The shares previously gained 34% since Trump's Nov. 8 victory, outpacing both the S&P 500 and the Dow Jones Industrial Average, amid speculation that the new president and his Republican allies would roll back tighter regulations imposed after the 2008 financial crisis.
Companywide, net interest margin, which measures interest income from borrowers after payments to depositors, widened 16 basis points from the end of last year to 2.39% as the Federal Reserve raised short-term rates in both December and March.
Income on the same basis rose 7.4% to $11.1 billion and should continue to climb this quarter, though more modestly, CFO Paul Donofrio said on the analyst call. His projection was slightly below the $11.45 billion estimate from Keefe, Bruyette & Woods, which dragged on the company's stock, said brokerage analyst Brian Kleinhanzl.
Bank of America fell 0.4% to $22.71 at the close of trading Tuesday in New York.
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