Bank Of America Q2 Profit Surges, Tops View; But Revenues Down

Bank of America Corp. reported Wednesday a surge in second-quarter earnings with sharp drop in provision for credit losses. Earnings per share topped market estimates, while revenues were weak and missed analysts’ view.

In pre-market activity on NYSE, Bank of America shares were losing around 2.2 percent to trade at $39.

Chairman and CEO Brian Moynihan said, “More than 85 percent of our buildings and offices are open, and we’re welcoming our teammates back. This means more face-to-face meetings; helping to increase sales of Consumer products and drive strong household growth in Wealth Management, and increased prospect calling in Commercial Banking. Consumer spending has significantly surpassed prepandemic levels, deposit growth is strong, and loan levels have begun to grow.”

For the second quarter, net income applicable to shareholders surged to $8.96 billion or $1.03 per share from prior year’s $3.28 billion or $0.37 per share.

Attributable profit also grew sequentially, compared to $7.56 billion or $0.86 per share recorded in the preceding first quarter.

The latest quarter’s provision for credit losses benefit was $1.6 billion, compared to last year’s provision for credit losses of $5.1 billion, reflecting a reserve release of $2.2 billion amid an improved macroeconomic outlook.

The company also recorded a $2.0 billion positive tax adjustment related to revaluation of UK deferred tax assets.

Analysts had expected the company to earn $0.77 per share, according to figures compiled by Thomson Reuters. Analysts’ estimates typically exclude special items.

The revenue for the quarter, meanwhile, fell 3.9 percent to $21.47 billion from $22.33 billion last year. Analysts were looking for revenues of $21.83 billion for the quarter.

Net interest income declined 6 percent from last year to $10.2 billion, driven primarily by lower interest rates. Noninterest income also fell 2 percent to $11.2 billion.

In the quarter, Consumer Banking revenue increased 4 percent, and Global Wealth and Investment Management revenue climbed 14 percent. Meanwhile, Global Banking revenue was relatively flat and Global Markets revenue decreased 12 percent.

Average loan and lease balances in business segments declined 11 percent to $889 billion, while deposits rose 14 percent to $1.9 trillion.

Source: Read Full Article

click fraud detection