New York (AP) — Bank of America’s second-quarter profits more than doubled year-on-year as retail banking giants were able to transfer more loans to the “good” side of their balance sheets as the pandemic weakened. became.
BofA is the latest from a major Wall Street bank that reported increased profits this quarter, primarily due to economic improvements and less delinquent loan borrowers. However, like other banks, BofA’s interest income and earnings declined year-on-year due to lower interest rates.
Charlotte-based banks say they have made $ 9.22 billion, or $ 1.03 per share, in the last three months. That’s up from $ 3.53 billion from the year-ago quarter, or 37 cents per share. According to FactSet, the results were better than analysts’ forecasts of 77 cents per share.
Bank of America’s profits were boosted by two temporary items. Banks were able to free $ 1.6 billion from the allowance for doubtful accounts set aside to prevent defaults during a pandemic, and also recorded a $ 2 billion temporary loan associated with certain UK taxable assets.
Bank of America profits increased year-over-year, but profits did not. Interest income for the quarter fell from $ 10.85 billion in the year-ago quarter to $ 10.23 billion due to lower interest rates. Bank of America’s balance sheet is more heavily weighted against short-term securities. In other words, when interest rates change compared to other banks, the interest income of the bank can fluctuate more.
Banks also saw a decline in returns from trading, similar to what happened at JPMorgan Chase and Goldman Sachs. The second quarter of 2020 was a very volatile quarter as traders overcame the effects of the pandemic. This gave Wall Street traders ample opportunity to find investments that would benefit from volatility. Now that things have cooled down, their profits have diminished.
The bank’s global market division, including the trading desk, reported a quarterly profit of $ 908 million. This is down from $ 1.9 billion in the previous year.
Bank of America’s second-quarter profit surges, supported by lower non-performing loans
Source link Bank of America’s second-quarter profit surges, supported by lower non-performing loans