Bank of America Faces Profit Dip Amid Rising Deposit Competition

Bank of America's profitability took a hit in the third quarter due to a decline in net interest income as it faced stiff competition for deposits. This contrasts with positive results from competitors JPMorgan Chase and Wells Fargo. Net income dropped to $6.9 billion, down from $7.8 billion last year.

Bank of America reported a decline in third-quarter profit, primarily attributed to a reduction in income from customer interest payments. The bank has been navigating a competitive landscape, with rivals attracting deposits through more attractive interest rates.

In response to heightened competition, banks have been upping interest rates to prevent deposit outflows to other lucrative avenues like money market funds. Consequently, Bank of America's net interest income witnessed a 3% decrease, amounting to $14 billion in this quarter.

The earnings report diverged from those of competitors such as JPMorgan Chase and Wells Fargo, which recorded better-than-expected results and affirmed strong U.S. consumer finances. Bank of America's net income experienced a drop to $6.9 billion, or 81 cents per share, compared to $7.8 billion, or 90 cents per share, in the previous year.

(With inputs from agencies.)