Bank of America Q2 profit beats estimates, Companies & Markets

Daniel Fowler
July 19, 2019

Bank of America, the second biggest U.S. bank by assets, reported Wednesday that profits jumped 10 percent from previous year to $7.1 billion in profits, setting a new record.

The Charlotte, N.C. -based bank, the second-largest in the assets, posted a profit of $7.35 billion, an 8% increase from the $6.78 billion a year earlier.

Analysts had expected a profit of 71 cents per share and revenue of $23.2 billion, according to IBES data from Refinitiv, but it was not immediately clear if the numbers were comparable.

Chief Financial Officer Paul Donofrio said on a call with reporters the sequential decline was due to lower long-term interest rates.

"Our view of the economy reflects the activity by the one-in-two American households we serve, which points to a steadily growing economy", said Brian Moynihan, chief executive of the lender. Some companies were affected by the continuing trade battles between the USA and its trading partners, he said.

In the absence of higher interest rates to help pad revenue, banks can improve margins by reducing expenses.

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The biggest USA banks are benefiting from a solid job market, relatively strong economic growth and Federal Reserve interest-rate increases stretching back to late 2015.

"Our commitment to responsible growth resulted in the best quarter and first-half year of earnings in our company's history", Moynihan said in the earnings release.

Global Banking net income of $1.93B fell from $2.03B in Q1 and $2.11B in Q2 2018.

In Bank of America's trading division, revenue dropped to $3.27 billion, slightly less than the average estimate of $3.32 billion.

Net income from consumer banking rose 13 percent to $3.3 billion while loand increased 6 percent to $296 billion. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services.

Bank of America shares were little changed at US$28.99 at 7:05 early NY trading. Trading revenue fell about 10%.

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