Bank of America Profits Again
Release date: 07/19/12
CHARLOTTE -- Bank of America Corp.’s second-quarter profit beat analysts’ expectations as a result of higher mortgage banking income, improved credit quality and solid results from the wealth management and corporate and commercial banking businesses, the lender reported Wednesday. The Charlotte-based bank earned $2.1 billion for common shareholders, or 19 cents per diluted share. That’s above analysts’ predictions ahead of the report of 14 cents per share. And it marks a turnaround from the second quarter of 2011, when Bank of America posted its biggest loss ever, $9.1 billion for common shareholders. “In a challenging global economy, we still see opportunities to do more with our customers and clients,” Chief Executive Brian Moynihan said in a news release. “Lending to commercial businesses increased for the sixth straight quarter … and consumer credit is in the best shape in years.” Bank of America continued to ramp up capital ahead of new international standards in the second quarter, too, Chief Financial Officer Bruce Thompson said, citing a combination of earnings growth and a reduction in risk-weighted assets. “In one year, our Tier 1 common capital ratios have gone from being the lowest of the major U.S. banks to among the highest, and we’ve maintained our strong liquidity levels even as we reduced our long-term debt by $125 billion,” he said. In an early-morning news release, the bank also revealed more details about its wide-ranging efficiency initiative, Project New BAC. The effort’s second phase is expected to yield annualized savings of $3 billion by mid-2015. The initiative’s total annualized savings are now projected to be $8 billion, the bank said. After a tough few years in the aftermath of the financial crisis, Bank of America has reported stronger earnings in recent quarters. But some analysts have worried one-time gains and losses have clouded the bank’s true results, raising questions about its potential for growth. Bank of America is the latest large lender to report earnings this month. San Francisco-based Wells Fargo & Co., which bought Charlotte’s Wachovia in 2008, last week reported a record profit of $4.4 billion for common shareholders, or 82 cents per share, in the second quarter.
|
