Bank of America beats on earnings after record quarters in global banking and wealth management

caption
Investment banking continues to thrive at Bank of America. Pictured: Bank of America CEO Brian Moynihan.
source
Chris Keane/Reuters

Bank of America released earnings Tuesday morning, besting Wall Street expectations on net income and revenue after record quarters from its global banking and wealth management units.

The bank announced earnings of $0.46 per share and revenues of $22.8 billion, besting analysts estimates of $0.43 per share and $21.8 billion in revenues.

“Against modest economic growth of 2 percent, we had one of the strongest quarters in our history. All of our businesses delivered strong results, with several setting new records,” Bank of America CEO Brian Moynihan said. “The investments we made to transform how we serve clients produced 500 basis points of operating leverage in the quarter.”

Here are the key numbers:

    Net income of $5.3 billion, a 10% increase from last year.EPS increased 12% to $0.46.Revenues of $22.8 billion, a 7% increase from last year.Net interest income increased 9% to $11.2 from last year, but it was down from Q1.Net interest margin slipped five basis points to 2.34% from the first quarter.Following suit with other banks, sales and trading revenue dropped to $3.2 billion, down 9%.

Global wealth and investment management posted a record quarter with $804 million in net income, as total client balances increased $198 billion to a record $2.6 trillion.

Global banking posted record revenues of $5 billion, buoyed by firmwide investment banking fees being up 9% to $1.5 billion. The company also posted record advisory fees.

Sales and trading was down 9% to $3.2 billion, a dip that analysts had been anticipating. Trading revenues have faltered across Wall Street, and Bank of America had been expecting a 10% to 12% decline in trading income from last year.

Bank of America’s results follow a generally strong showing from peers JPMorgan, Wells Fargo, and Citigroup last week. Each of the big banks have beat estimates, with JPMorgan hauling in record earnings from its commercial banking and asset and wealth management units.

But each of the banks also saw their shares fall immediately after reporting, a trend that has hit Bank of America as well.

Bank of America shares were down 0.78% or $0.19 a share following the results.