Bank of America is minting money thanks to tax cuts, turbulent markets and the stronger economy.
America’s second-largest bank hauled in $6.9 billion in profit during the first three months of 2018. That’s the biggest quarterly profit in Bank of America’s history, taking out the previous record set in 2011.
The blockbuster earnings are at least partly because of President Trump’s corporate tax cuts.
Bank of America (BAC) paid Uncle Sam $1.5 billion in income tax, down 26% from last year, even though overall profit soared 30%.
The bank said the tax law lowered its effective tax rate by 9 percentage points. The new corporate tax rate is 21%, down from 35%.
Without the gift of the tax law, Bank of America’s results would have been less stellar. Pretax income rose a more modest 15%, while revenues ticked up just 4%.
Like other Wall Street firms, Bank of America benefited from the recent market mayhem. Clients rushed to execute buy and sell trading orders as they watched the Dow gyrate.
Bank of America’s sales and trading revenue jumped 6% to $4.1 billion. The bank said stock trading revenue surged by 38% to $1.5 billion. The company cited “increased client activity” and a strong trading performance in futures, options and other complex securities.