Business

Goldman Sachs and Bank of America see profits jump

Bank of America ATM Image copyright Reuters
Image caption Bank of America is one of the largest banks in the US

Two major US banks have reported increased profits for the first quarter of the year, amid higher interest rates and an energy sector rebound.

Profits at Bank of America were $4.35bn (£3.44bn), up 44% from the same period in 2016, with gains across its major divisions.

Goldman Sachs profits rose 80% from a year earlier to $2.2bn.

But the firm disappointed analysts with a decline in revenues from institutional investors.

Shares in Goldman Sachs fell more than 3% after the market opened.

Goldman chief executive Lloyd Blankfein said: "The operating environment was mixed, with client activity challenged in certain market-making businesses and a more attractive backdrop for underwriting in our investment banking franchise."

Goldman said revenue in the January to March period was about $8bn. Investment banking revenue rose 16%, but its institutional client services unit - the largest division by revenue - declined 2% from the 2016 first quarter.

Total costs at the bank increased by 15%, driven by higher pay.

At Bank of America, gains in the global banking unit helped to boost profits in the January-to-March period. The division's net income was $1.7bn, rising 58% year-on-year due to record investment banking fees.

Total revenue increased 7% to $22.2bn.

"The US economy continues to show consumer and business optimism, and our results reflect that," chief executive Brian Moynihan said.

Bank of America, which serves some 46 million households, last year was hurt by losses related to property and the energy industry in the first quarter. Those have declined, but the firm said it saw an uptick in credit card losses from the end of 2016.

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