11:23 AM EDT, 10/15/2024 (MT Newswires) -- Bank of America ( BAC ) reported higher-than-projected results for the third quarter on Tuesday as higher investment banking fees and trading revenue helped offset lower net interest income.

Revenue, net of interest expense, rose to $25.35 billion for the three-month period ended Sept. 30 from $25.17 billion. It topped the $25.23 billion average analyst estimate on Capital IQ. The top line was driven by higher asset management and investment banking fees, as well as stronger trading revenue, though partially weighed down by lower NII, according to the bank.

Earnings per share dipped to $0.81 from $0.90 year over year but surpassed the $0.76 Street view.

NII declined 3% on an annual basis to $13.97 billion as higher asset yields and loan growth were more than offset by higher deposit costs. However, NII increased by 2% on a sequential basis, according to BofA. Provision for credit losses increased to $1.54 billion from $1.23 billion.

"Global Markets activity and pricing, fixed asset repricing and one extra day all benefited NII while higher funding costs partially offset those benefits," Chief Financial Officer Alastair Borthwick told analysts on conference call, according to a preliminary Capital IQ transcript. "The 50-basis-point rate cut in September also negatively impacted NII."

The Federal Reserve lowered its benchmark lending rate by 50 basis points last month, compared with a Bloomberg-compiled consensus that had indicated a quarter-percentage-point reduction.

Revenue in the global markets segment advanced 14% year over year to $5.63 billion due to increased trading revenue and investment banking fees. Global banking revenue fell 6% to $5.83 billion while the division's earnings plummeted 26% year over year due to lower net interest income and a higher provision expense, Borthwick said on the call.

Consumer banking revenue dipped 1% to $10.42 billion. Global wealth and investment management revenue increased 8% to $5.76 billion, led by higher asset management fees.

Consolidated NII is expected to grow in the fourth quarter to $14.3 billion or more on a fully tax equivalent basis, according to Borthwick. That compares with NII of $13.95 billion in the same period of 2023, or $14.1 billion on an FTE basis.

"We're poised to improve with NII from here," Borthwick told analysts. "We have to watch what goes on with the rate curve when (there's) a surprise like an extra 25 basis points that will flow through the entire fourth quarter, it might set us back a few weeks. But we just keep doing what we're doing, the organic growth is going to fuel the net interest income growth over time."

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