Bank of America (BAC) reported quarterly earnings and revenue that beat analysts' expectations on Monday.
The company posted second-quarter net income of $4.23 billion, or $0.36, down close to 18% from $5.13 billion, or $0.45 a share a year earlier. Revenue for the quarter fell 7% to $20.4 billion, against the comparable year-ago figure of $22 billion.
Most of the company's divisions produced higher sales and net income in Q2'16 vs. the year-ago period, with the exception of both the wealth management operations and activities not included in the bank's consumer banking, global banking and global markets operations.
Revenue for asset liability management and other activities (such as equity investments, international consumer cards, noncore mortgage loans and servicing activities and interest rate and foreign currency risk management work) plunged from $1.7 billion last year to -$708 million in Q2'16. The unit also had a loss of $815 million in Q2'16 vs. a profit of $781 million a year ago.
"Our responsible growth strategy led to improved customer and client activity and each of our four business segments reported higher earnings than the year-ago quarter," Bank of America CEO Brian Moynihan said in a statement. "We also moved closer to our longer-term performance targets."
Net interest income for the bank decline 12% in the year-ago period to $20.4 billion.
"We believe we surely can [maintain a profit if interest rates do not rise]," Moynihan explained on a call with equity analysts. "If rates rise, we would expect [net interest income] to grow."
Wealth Management
Revenue from Merrill Lynch, U.S. Trust and the bank's consumer-banking unit was down 2.4% year over year to $4.46 billion, while net income improved 8% to$722 million. The unit's net interest income rose slightly to $1.43 billion from $1.35 billion last year.
