Bank of America 1Q profits rise to record $6.9 billion

FILE- In this Nov. 6, 2017, file photo, people walk by a branch office of Bank of America in New York. Bank of America Corp. reports earnings Monday, April 16, 2018. (AP Photo/Mark Lennihan, File)

NEW YORK — Bank of America's profits rose to a record $6.9 billion last quarter thanks in part to the new tax law and higher interest rates.

The consumer banking giant earned $6.92 billion, or 62 cents per share, up from $5.34 billion, or 45 cents a share, from the same period a year ago. Analysts had been expecting a per-share profit of 59 cents, according to FactSet.

Like its competitors JPMorgan Chase and Citigroup, Bank of America reported a sharp drop in its tax bill Monday, which helped boost profits. While the bank's pretax income rose by roughly $1 billion, the amount it paid in taxes fell by roughly $500 million in the quarter. The Charlotte, North Carolina, bank estimates that the tax law cut its effective tax rate by 9 percentage points.

This first-quarter earnings season will give investors and the public their first good look into how President Donald Trump's tax law is impacting corporate America. Banks are among the first to report results at the beginning of each quarter.

Higher interest rates benefited the bank as well. The Federal Reserve has steadily raised interest rates, allowing banks to charge customers more to borrow. In Bank of America's consumer banking division, its largest business by revenue and profit, net interest income rose 13 percent from a year earlier. The bank also grew loans and deposits in the quarter.

While higher interest rates should translate into better interest rates for savers, most of the benefits have gone to the banks, not account holders. Bank of America paid just an average of 0.30 percent on its interest-earning deposits last quarter, up from 0.09 percent a year earlier.

Total revenue for Bank of America in the quarter was $23.13 billion, up from $22.25 billion in the same period a year earlier.

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