Bank of America Corp reported a 15 per cent rise in third-quarter profit on Friday as the lender kept a tight leash on costs and benefited from higher interest rates.

Chief Executive Brian Moynihan's years-long effort to streamline the United States' second-largest bank and keep its costs in check are finally bearing fruit as the Federal Reserve raises borrowing costs.

The lender's large stock of deposits and rate-sensitive mortgage securities make it especially well placed to benefit from rate rises. Its third-quarter earnings performance beat rivals JPMorgan and Citigroup, which reported gains of 7.1 per cent and 7.6 per cent respectively on Wednesday.

"Loans were up about 6 per cent, thatRs not quite as high as JPMorgan who reported yesterday. But again margins improved and credit quality improved," Stephen Biggar, Argus Research director of financial institutions research, said. "And 6 per cent growth is quite good in a deteriorating environment."

The Federal Reserve's three rate increases since December boosted Bank of America's net interest income 9.4 per cent to $11.16 billion and the central bank is widely expected to raise rates again in December.

Provisions for credit losses rose 15 per cent from the second quarter, driven by credit cards and loan growth but Bank of America Chief Financial Officer Paul Donofrio said that did not signal maxed out consumers.

"We are optimistic about the general economy. There are just a lot of positive signs out there," he told reporters.

Similar to rivals, trading revenue at the Charlotte, North Carolina-based lender fell 15 percent, with revenue from fixed income trading down 22 per cent.

For most of the past seven years, Wall Street banks have been grappling with low bond market volatility and new regulations that have restricted certain activities and made trading more expensive.

Bank of America's large consumer banking business and wealth management arm mean it is less dependent on trading than rivals such as Goldman Sachs, which reports third-quarter results, along with Morgan Stanley, on Tuesday.

Hopes that U.S. President Donald Trump will be able to stimulate bond trading activity and boost demand for loans have yet to be fulfilled as his tax overhaul and plans to loosen financial regulations have yet to be realized.

"Tax reform is going to be great for the economy ... but I don't think people are waiting around," Donofrio said 

In the meantime, banks are sticking to their cost-cutting playbook. Bank of America's non-interest expenses fell 3 per cent in the third quarter from a year ago. Total revenue rose about 1 per cent to US$22.08 billion.

The bank's efficiency ratio of 60, which measures expenses as a percentage of revenues, was in line with management's long-term target.

Overall, the bank's net income attributable to common shareholders rose to US$5.12 billion for the quarter from US$4.45 billion in the year-ago period. Earnings per share rose to 48 cents from 41 cents.  

Analysts on average had expected earnings of 45 cents per share, according to Thomson Reuters I/B/E/S.

The bank's shares, which are up nearly 16 per cent year to date, were flat in pre-market trading.