Bank of America Posts Mixed Results -- 2nd Update
January 13 2017 - 7:44AM
Dow Jones News
By Christina Rexrode and Peter Rudegeair
Bank of America Corp. said its fourth-quarter profit rose 43% as
its trading desk benefited from the uncertainty caused by Donald
Trump's surprise election.
Quarterly profit at the Charlotte, N.C.-based bank grew to $4.7
billion from $3.28 billion a year earlier. Per-share earnings rose
to 40 cents from 27 cents. Analysts had expected 38 cents a
share.
Revenue improved 2.1% to $19.99 billion. On an adjusted basis,
revenue was $20.22 billion, less than the $20.85 billion analysts
had been expecting.
Brian Moynihan, who this month marked his seven-year anniversary
as CEO, is enjoying a period of relative calm after years of heavy
loan losses and debilitating legal fees. Now, Mr. Moynihan is
working on improving shareholder returns. The bank's shares have
shot up by a third since Mr. Trump's election, more than the rally
across broader bank stocks.
The bank also unveiled plans to increase its planned share
repurchases for the first half of this year, $4.3 billion from $2.5
billion.
Trading revenue, excluding an accounting adjustment, rose 11% to
$2.91 billion from $2.63 billion in the fourth quarter of last
year. Fixed-income trading revenue grew 12%, and equities climbed
7.5%.
Bank of America's large base of U.S. deposits and rate-sensitive
mortgage securities makes it particularly dependent on an uptick in
interest rates, which remain at record lows even though the Federal
Reserve raised interest rates last month. The bank's net interest
income rose 6.3% to $10.29 billion.
"While the recent rise in interest rates came too late to impact
fourth-quarter results, we expect to see a significant increase in
net interest income in the first quarter of 2017," Chief Financial
Officer Paul M. Donofrio said in a statement.
Quarterly expenses declined 6.1% to $13.16 billion from $14.01
billion a year earlier as the bank continued to cut jobs and sell
or shutter branches. Mr. Moynihan has made cost cutting a key tenet
of his strategy, sometimes noting how the bank could save both time
and money by switching more customers from cash and checks.
Over the summer, Mr. Moynihan promised to cut another $5 billion
in annual expenses by 2018. To get to that level, the bank would
need to turn in expenses averaging $13.25 billion a quarter.
Shares rose 0.4% in premarket trading.
Write to Christina Rexrode at christina.rexrode@wsj.com and
Peter Rudegeair at Peter.Rudegeair@wsj.com
(END) Dow Jones Newswires
January 13, 2017 07:29 ET (12:29 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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