Bank shares rise as Citi and BofA beat expectations on strong trading
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The news: Bank shares rose after Citigroup and Bank of America reported higher-than-expected profits and said US consumers continued to spend even as concerns about tariffs and the economy began to bubble up.
The context: Both Wall Street lenders beat profit estimates for the March quarter as traders capitalised on market volatility and increased client activity, driven in part by uncertainty over President Trump’s tariff policies.
The banks also pointed to resilient consumer spending and healthy credit quality, even as concerns about the economic impact of tariffs continued to build.
The numbers: Citigroup’s net income rose 21% to USD4.1 billion ($6.4 billion), or USD1.96 per share, with USD6 billion in trading revenue including an 8% jump in fixed income and a 23% gain in equities. Its wealth business posted record revenue of USD2.1 billion, led by Wealth at Work, which provides tailored advice to lawyers and professional-services firms.
Investment banking revenue increased 12% to USD2 billion. Provisions for credit losses rose 15% to USD2.7 billion.
Bank of America reported USD7.4 billion in earnings, or 90 cents per share, up from USD6.7 billion a year earlier. Revenue rose 5.9% to USD27.51 billion.
Net interest income climbed 3% to USD14.6 billion. Equities trading hit a record USD2.2 billion, up 17%, and fixed income rose 5% to USD3.5 billion. Provisions for credit losses were USD1.5 billion, up from USD1.3 billion last year.
Bank of America shares were up over 4.4% while Citi shares rose over 3.4%.
What they said: “When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the US will still be the world’s leading economy, and the dollar will remain the reserve currency,” said Citi’s CEO Jane Fraser.
“Cross-border trade flows will change... We’ll be in the middle of facilitating that. We expect to be very busy there.”
At BofA, CEO Brian Moynihan said: “Our business clients have been performing well, and consumers have shown resilience, continuing to spend and maintaining healthy credit quality.”
The sources: Citi, Bank of America
