Bank of America's Earnings, Revenue Grow More Than Expected -- Update
July 18 2017 - 7:28AM
Dow Jones News
By Rachel Louise Ensign
Bank of America Corp. said its second-quarter profit rose 10% as
rising short-term interest rates offset a trading slump.
Quarterly profit at the Charlotte, N.C.-based bank was $5.27
billion, compared with $4.78 billion a year ago. Per share,
earnings were 46 cents. Analysts had expected 43 cents a share.
Second-quarter revenue was $23.07 billion, from $21.51 billion a
year ago. Analysts had expected $21.78 billion.
Bank of America shares have rallied of late, climbing 41% since
the November election. The initial share-price gains after Donald
Trump's surprise victory have been sustained as the lighter
regulatory touch investors hoped for has started to materialize.
Short-term interest rates have also kept moving higher with the
jobs picture strengthening, aiding the bank's results.
In late June, Bank of America got Federal Reserve approval for a
large increase in its dividend and stock buybacks. Since then, the
bank's stock has regularly traded above its book value, a level it
never reached between the financial crisis and the start of
2017.
But the lender, the second largest U.S. bank by assets, faced
challenges in the second quarter. The bank warned trading revenue
would be under pressure. Excluding adjustment, sales and trading
revenue fell 9%, hurt by a 14% slide in the fixed income
division.
Also, long-term interest-rates reversed and started moving lower
during part of the quarter, which contributed to the lender
trimming its expectations for growth in net interest income.
Similar factors weighed on earnings reports from J.P. Morgan Chase
& Co. and other big lenders that reported their earnings on
Friday.
The bank's provision for credit losses improved to $726 million
from $976 million a year earlier.
Bank of America shares fell 0.7% in premarket trading.
Write to Rachel Louise Ensign at rachel.ensign@wsj.com
(END) Dow Jones Newswires
July 18, 2017 07:13 ET (11:13 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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