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Abu Dhabi, UAETuesday 13 November 2018

Bank of America profit tops estimates

Net income applicable to common shareholders rose to $6.47 billion in the second quarter, from $4.75bn a year earlier

ATMs at a Bank of America branch in San Antonio, Texas. The lender has beaten forecasts. Bloomberg
ATMs at a Bank of America branch in San Antonio, Texas. The lender has beaten forecasts. Bloomberg

Bank of America reported quarterly profit above Wall Street expectations as the second-largest US lender kept a tight leash on expenses and benefited from growth in loans and deposits.

Total loans increased 2 per cent, with the bank's consumer banking and wealth management businesses both recording growth of about 7 per cent.

Recent moves by regulators and politicians to lower tax rates have largely benefited US banks, but concerns around an escalating trade war between the United States and China have cast some doubt on future loan growth.

Speaking at a conference in May, the bank's head of global corporate banking said the pipeline of new loans was better than it was in 2017, but that it was too soon to predict lending demand for the year.

"Solid operating leverage and client activity drove earnings higher this quarter ... We grew consumer and commercial loans; we grew deposits," chief executive Brian Moynihan said.

BofA's shares rose 1 per cent in premarket trading.

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Net income applicable to common shareholders rose to $6.47 billion in the second quarter, from $4.75bn a year earlier.

Earnings per share was 63 cents, compared with 44 cents a year earlier.

Excluding items, it earned 64 cents per share compared with the average expectation of 57 cents per share, according to Thomson Reuters.

Non-interest expense fell 5 per cent, while tax bill was down 43 per cent.

Revenue, net of interest expense, fell 1 per cent to $22.76bn. Revenue in the year earlier quarter included a $793 million pretax gain on the sale of the bank's non-US consumer card business.