Bank of America cut quarterly earnings by 33%

Bank of America Corp., the second largest bank in the United States, increased revenue in the second quarter of 2022 by 6%, but its net profit fell by 33%.

According to the BofA report, the bank’s revenue in April-June amounted to $22.7 billion compared to $21.5 billion a year earlier. Experts surveyed by FactSet had expected the average to be $22.7 billion.

Net profit in the last quarter decreased to $6.2 billion from $9.2 billion a year earlier. Earnings per share fell to $0.73 from $1.03, with analysts’ consensus forecast of $0.75.

„We believe the earnings generated over the next 18 months will provide us with sufficient capital to support business development, dividend payouts, share buybacks and further investment in our people, platforms and communities,” BofA Chief Financial Officer Alistair Borthwick said in a statement.

Net interest income of the bank in the last quarter increased by 22% and reached $12.4 billion (market forecast – $12.32 billion). Non-interest income, by contrast, fell 9% to $10.23 billion, mainly due to the downturn in the capital markets.

BofA’s capital markets revenue fell 5% to $4.5 billion primarily due to lower investment banking fees and a repricing of certain financial positions. Income from operations with assets with fixed income, commodities and currencies (FICC) increased by 29% – to $2.5 billion, from operations with shares – increased by 1.8%, to $1.65 billion.

BofA’s retail banking revenue rose 12% to $9.1 billion. Deposits jumped 10% to over $1 trillion.

The wealth management and investment management business generated $5.4 billion in revenue for BofA, up 7% from a year earlier.

Tier 1 capital adequacy ratio (CET1) of the bank as of June 30 was 10.5% against 10.4% three months earlier.

In April-June, the bank returned $2.7 billion to shareholders through dividend payments and share buybacks.

BofA shares lost 0.3% in early trading on Monday. Since the beginning of 2022, the value of the bank’s securities has decreased by 27.5%, while the Standard & Poor’s 500 stock index has lost 19%.

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