BofA bond-trading beats estimates as four main units post gains

BANK OF America Corp., the second-biggest U.S. bank by assets, posted higher profit in each of its four main businesses as bond-trading revenue increased more than analysts estimated.
BANK OF America Corp., the second-biggest U.S. bank by assets, posted higher profit in each of its four main businesses as bond-trading revenue increased more than analysts estimated.

NEW YORK – Bank of America Corp., the second-biggest U.S. bank by assets, posted higher profit in each of its four main businesses as bond-trading revenue increased more than analysts estimated.

Net income dropped 21 percent, to $4.23 billion, as the company booked a roughly $1 billion accounting charge, Charlotte, N.C.-based Bank of America said Monday in a statement. Per-share earnings were 36 cents, compared with 43 cents a year earlier. The average estimate of analysts surveyed by Bloomberg was 33 cents.

CEO Brian Moynihan has focused on cutting expenses while persistently low interest rates crimp revenue and profit. Moynihan said in April after reporting first-quarter results that showed better-than-expected cost reductions that “there’s a lot more to do.” Chief Operating Officer Thomas Montag, 59, issued an edict to trading and investment-banking managers this year to lower costs, people with knowledge of the matter said earlier this year.

Expenses dropped 3.3 percent to $13.5 billion while revenue declined 7.1 percent to $20.4 billion. Global markets, which includes trading, posted a 42 percent profit increase to $1.12 billion as revenue climbed. The bank reaped $2.62 billion from bond trading, a 22 percent increase, beating the average estimate by about $300 million, and $1.09 billion from equities, a 7.6 percent drop that matched estimates.

- Advertisement -

“We also moved closer to our longer-term performance targets” with higher profit in all four business segments, Moynihan said in the statement.

Bank of America shares, which had dropped 19 percent this year, advanced 3 cents to $13.69 at 7:23 a.m. in New York.

Global wealth-management profit increased 7.9 percent to $722 million as revenue declined 2.4 percent.

Moynihan, 56, spent most of his tenure wrestling with legal costs tied to his predecessor’s acquisitions of Countrywide Financial Corp. and Merrill Lynch & Co. Last week, the bank dissolved the business segment it created in 2011 to house delinquent mortgage loans, putting more distance between the firm and its woes from the financial crisis.

JPMorgan Chase & Co., the largest U.S. bank by assets, posted second-quarter profit last week that beat analysts’ estimates as fixed-income trading revenue and loan growth increased. Profit declined at Citigroup Inc. and Wells Fargo & Co.

No posts to display