Bank of America profit tops estimates

NEW YORK, Apr 16 (Reuters): Bank of America Corp reported a better-than-expected rise in quarterly profit on Tuesday, as a growing loan book and cost cuts made up for a drop in revenue in investment banking.

The second-biggest US bank benefited from 3 per cent growth in consumer loans and 4 per cent growth in loans to businesses in the first quarter, allowing it to capture more revenue from higher US interest rates. Revenue rose in two of the lender's four main businesses.

The bank has benefited from the central bank's four rate hikes in 2018, while a strong job market has also kept bad loans in check and borrowing healthy. BofA relies heavily on higher interest rates to maximize profits as it has a large deposit pool and rate-sensitive mortgage securities.

Net interest income - the difference between what a lender earns on loans and pays on deposits - rose 5 per cent to $12.38 billion. Average deposits also rose nearly 5 per cent to $1.36 trillion.