Lower costs to cover bad loans helped Bank of America beat estimates with second quarter net income of $3.12 billion, or 33 cents a share, down slightly from $3.22 billion reported a year ago.
But future uncertainty pushed financial stocks downward today as Bank of America, the largest U.S. bank ranked by assets, faces uncertainty in months ahead as Wall Street oversight reform takes hold of the largest financial institutions, including top competitors JPMorgan Chase and Citigroup.
BofA also reported lower investment-trading profits, as did JPMorgan in its earnings report yesterday. The biggest banks have ridden post-crisis comebacks on investment services and the accompanying rise in equity markets over the past several months.
But both BofA and Chase, the No. 2 U.S. bank by assets, are continuing to see fewer credit losses.
Net charge-offs for Bank of America were $1.2 billion lower in the second quarter, compared to the previous quarter, reflecting improvement in consumer and commercial portfolios.
The provision for credit losses was $8.1 billion, $1.7 billion lower than the first quarter and $5.3 billion lower than the same period a year earlier.
“We improved our capital foundation through retained earnings, and credit quality improved even faster than expected,” said Chief Executive Officer and President Brian Moynihan.
Fees earned from fixed-income trading fell to $2.6 billion in the second quarter, down from $3.1 billion last year. Equities trading generated $1 billion, less than the $1.3 billion a year ago. Advisory revenue from the investment banking was at $2.4 billion for the second quarter.
See Bank of America’s second quarter earnings report.
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