Truist's Q3 profit beats estimates as investment banking recovers
Oct 17 (Reuters) -Truist TFC.N surpassed Wall Street's third-quarter profit estimates on Thursday, driven by higher income from investment banking and trading amid a recovery in capital markets activity.
After over two years of sluggish activity due to rising interest rates and stock market volatility, banks are seeing a resurgence in investment banking businesses, as corporate clients pursue large mergers and acquisitions, debt and equity sales, and previously deferred initial public offerings.
Truist said non-interest income rose 11% to $1.48 billion in the third quarter ended Sept. 30 from a year earlier, driven by higher equity and debt underwriting volumes.
Its quarterly investment banking and trading income surged 79.5% to $332 million.
Truist's results mirror larger rivals such as JPMorgan Chase JPM.N, Morgan Stanley MS.N and Citigroup C.N, which also surpassed third-quarter profit targets on investment banking gains.
Meanwhile, net interest income (NII), or the difference between what a bank earns on loans and pays out on deposits, rose 1.8% to $3.66 billion in the quarter. Net interest margin, which measures lending profitability, expanded to 3.12% versus 2.92% a year earlier.
The bank said the higher NII was driven primarily by balance sheet repositioning.
"We made considerable progress on driving revenue growth through our core banking business by adding new clients," said Truist CEO Bill Rogers in a statement. "Asset quality metrics were better than our expectations."
Truist reported an adjusted profit of 97 cents per share in the quarter, compared with analysts' average expectations of 91 cents per share, according to estimates compiled by LSEG.
Net income available to common shareholders rose to $1.34 billion or 99 cents per share, versus $1.07 billion or 80 cents per share, a year earlier.
Shares in the bank rose 0.6% in thin premarket trading after the results.
Reporting by Manya Saini in Bengaluru; Editing by Vijay Kishore
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