Bank of America’s 3Q profit jumps 32%

NEW YORK — Bank of America said Monday that its third-quarter profits rose by 32 percent from a year ago, as higher interest rates allowed it to charge more for loans, and lower corporate tax rates helped it save hundreds of millions on taxes.

The Charlotte, N.C.-based banking giant said it earned a profit of $7.17 billion, or 66 cents a share. That’s up from $5.42 billion, or 46 cents a share, a year earlier. The results topped the forecast of Wall Street analysts, who were looking for the bank to earn 62 cents a share. Net interest income rose 6 percent from a year earlier to $11.9 billion.

While Bank of America had to pay more for deposits in the quarter, the bank was more than able to make up for it by charging borrowers more to take out loans. The bank’s net interest spread, which is the difference between how much banks pay for deposits compared with what it charges to loan money out, widened to 2.42 percent in the quarter. Bank of America paid roughly 0.50 percent on interest-bearing deposits, up from 0.38 percent a year earlier, among the lowest of the major banks to report this quarter.

The bank also paid significantly less on taxes in the quarter. While the bank’s pretax profits rose by more than $1.3 billion in the quarter, the amount of money the bank set aside to pay taxes fell by $300 million.

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