Bank of America's Profit Slides
July 18 2016 - 7:50AM
Dow Jones News
Bank of America Corp. said its quarterly profit fell as the
second largest U.S. lender by assets was hurt by the continued drag
of low interest rates, though the bank's results beat
expectations.
Shares edged up 0.4% premarket.
The Charlotte, N.C.-based lender reported a profit of $4.23
billion, or 36 cents a share. That compares with $5.13 billion, or
45 cents a share, in the same period of 2015. The latest results
included 6 cents a share in market-related charges. Analysts polled
by Thomson Reuters had expected the bank to earn 33 cents a
share.
Revenue fell to $20.4 billion from $21.96 billion a year ago.
Adjusted revenue was $20.6 billion, above the $20.41 billion
expected by analysts.
Trading revenue, excluding an accounting adjustment, rose 12% to
$3.7 billion from $3.32 billion in the second quarter of last year.
J.P. Morgan Chase & Co. last week reported a 23% increase in
trading revenue, and Citigroup Inc. reported a 15% increase.
Net interest income fell 12% to $9.21 billion from $10.46
billion a year ago.
Expenses declined 3.3% to $13.49 billion from $13.96 billion a
year ago. The bank continued to cut jobs and sell or shutter
branches.
Things have been relatively calm for the bank and Chairman and
CEO Brian Moynihan. Last month, it passed the Federal Reserve's
stress test without incident for the first time since 2013. The
crisis-era legal fees that dogged earnings have been receding for a
couple years.
But now Mr. Moynihan, who has led the bank for six and a half
years, is working to pivot to improving earnings, shareholder
returns and the bank's stock price. That task has been made more
difficult of late by long-term bond yields falling, something that
hurts the bank's lending profitability and investments in mortgage
securities.
Bank of America's shares have fallen 19% since the start of the
year, worse than any peer bank and a steeper fall than the 8% drop
in the KBW Nasdaq index of bank stocks.
Write to Christina Rexrode at christina.rexrode@wsj.com and
Peter Rudegeair at Peter.Rudegeair@wsj.com
(END) Dow Jones Newswires
July 18, 2016 07:35 ET (11:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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