LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » World News

Bank of America beats Wall Street view on consumer banking, cost cuts

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
Updated: Tue, Jul 18, 2017
08:39 pm
Reuters

Bank of America Corp reported a higher-than-expected quarterly profit on strength in its consumer bank and cost cuts that are beginning to bear fruit after years of branch closures, staff cuts and efforts to reduce technology and paper-related expenses.

In the consumer division, Bank of America managed to increase deposits at a lower cost and use those cheaper funds to fuel loan growth. That business posted profits higher than any other unit, and contributed more to the bottom line.

Overall, Bank of America hit a target of spending 60 cents for every dollar of revenue it produces, down from 63 cents a year earlier. Investors have been watching that metric closely as a sign of how efficiently the bank is run.

Bank of America, the second-largest U.S. lender by assets, is working to reduce annual operating expenses to $53 billion next year.

"This was a good quarter all around for BofA," said Evercore ISI analyst Glenn Schorr. "You really have to look hard to find a few issues to talk about."

Chief Executive Officer Brian Moynihan and Chief Financial Officer Paul Donofrio both characterized the second quarter as one of the best in the bank`s history.

"These results tell us that responsible growth is working," Donofrio said in a call with journalists on Tuesday.

Bank of America delivered net income of $4.9 billion, or 46 cents per share, up 11 percent from the year-ago period. Analysts had been expecting 43 cents, on average, according to Thomson Reuters I/B/E/S.

The bank`s total revenue of $23.07 billion also beat the average analyst estimate of $21.78 billion.

Its shares were slightly down at $23.98 in premarket trading, following a 8.4 percent year-to-date rise through Monday`s close.

Even as big banks have reported better results, investors have been disappointed that profits are not growing faster. Last week, shares of JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc each fell after beating analysts` estimates, as did Goldman Sachs Group Inc on Tuesday.

Gains across Bank of America`s businesses were broad, but particularly in its consumer bank.

The business reported loan growth across residential mortgages, credit cards and autos compared with the year-ago quarter. Even as interest rates rose during the quarter following a rate hike from the U.S. Federal Reserve, Bank of America managed to lure an additional $17 billion in deposits while paying less to attract those funds.

Analysts consider Bank of America the most interest-rate sensitive among big U.S. banks because of the way its balance sheet is constructed in terms of loan maturities, types of funding and hedges. Its net interest income, which measures the difference between its cost of funding and the income it generates from those funds, rose 8.6 percent to $10.99 billion in the second quarter.

Apart from its global markets unit, which suffered a downturn in trading like other Wall Street banks, Bank of America`s other business lines also produced higher profits.

Wealth and investment management reported record net income of $804 million, and a record pretax profit margin of 28 percent. Both the wealth business and retail brokerage, which sits inside the consumer business, attracted more assets.

Global banking also earned more money, with growth in corporate and commercial loans, more revenue from transaction services and higher investment banking fees related to those customers.

Non-interest expenses rose 1.7 percent, partly due to charges related to closing data centers. But the bank still managed to hit Moynihan`s efficiency target and produced 5 percentage points of "operating leverage," which measures how well a company can maintain revenue while cutting costs.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:

LATEST NEWS

What expert said about these Rakesh Jhunjhunwala stocks in gaming space - Delta Corp, Nazara Technologies

CBSE Class 10 exam 2021 evaluation criteria: EXPLAINED! Here is how board will promote Class 10 students

Gold Price Today 14-04-2021: Gold turns EXPENSIVE, hits Rs 49,000-mark, in Delhi markets, Silver at 70,000; Expert tells INVESTMENT strategy

ICSE Class 10, Class 12 exam 2021: After CBSE cancels Class 10 exam, CISCE to soon take decision on ICSE board exams 2021

PUBG Mobile 1.4 beta update: Check invitation code, new features, Godzilla vs Kong collaboration, APK download link and more

Cancel CBSE Board Exam 2021: After Arvind Kejriwal, Punjab CM Amarinder Singh says POSTPONE CBSE board exams, shoots off letter to Pokhriyal

Asus ZenBook Duo (UX482) review: Decent dual-screen laptop, good performer

WhatsApp feature: Check how to activate, transfer money and other details NOW

YES Bank stock! Expert suggests Rs 17-18 target price for this lender

TCS emphasizes on providing technological solutions to its customers: V Ramakrishnan, CFO

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved