- REUTERS/Bobby Yip
Bank of America reported third-quarter earnings on Wednesday that beat expectations.
The bank reported earnings per diluted share of $0.37 on revenue $20.68 billion.
Analysts were expecting earnings per share of $0.33 on revenue of $20.73 billion, according to Bloomberg.
“We saw solid results this quarter by continuing to execute our long-term strategy,” CEO Brian Moynihan said.
“The key drivers of our business – deposit taking and lending to both our consumer and corporate clients – moved in the right direction this quarter, and our trading results on behalf of clients remained fairly stable in challenging capital markets conditions.”
In the same quarter last year, the bank reported a loss of $0.04 per share, revised down from a loss of $0.01 per share, on revenue of $21.4 billion.
Here’s the breakdown for Q3:
- Revenues in investment banking were $4.2 billion. Net income of $1.3 billion was down from $1.5 billion in the same quarter last year. That’s because of lower net interest income and lower underwriting fees, according to the bank. Trading revenue came in at $4.07 billion. Fixed income, currencies, and commodities sales and trading revenue decreased 11% from the year-ago quarter after the bank saw a drop in credit-related businesses. That was offset partially by better rates products. Equities sales and trading revenue, meanwhile, was up 12% because of good derivatives performance. That’s a sign of favorable market conditions, according to the bank. Wealth and investment management revenue was $4.5 billion, down $198 million from the same quarter a year ago. Higher asset-management fees were offset by lower transactional revenue, according to the bank, “as clients continue to migrate from brokerage to managed relationships.” Consumer banking revenue was $7.8 billion for the quarter, up 1% from a year ago, while net income was up 5%. The bank originated $13.7 billion in first-lien residential mortgage loans and $3.1 billion in home-equity loans, compared with $11.7 billion and $3.2 billion, respectively, in the year-ago quarter. Mobile banking users jumped 14% from the year-ago quarter to 18.4 million. The number of 60-plus-days delinquent first-mortgage loans was down 14% from the prior quarter and 48% from the year-ago quarter. Legal fees were $231 million. That’s down a lot from the same quarter last year, when the bank paid a $5.8 billion fine to the Department of Justice that shaved earnings per share by about $0.43.
In the second quarter, the bank reported earnings that beat on the top and bottom lines.
Bank of America also got a new CFO. Bruce Thompson left that position shortly after second-quarter earnings were released in July, and he has been replaced by Paul Donofrio.
JPMorgan reported third-quarter earnings on Tuesday. Wells Fargo will report next, around 8 a.m. Wednesday.