{"id":13662,"date":"2016-10-17T12:05:42","date_gmt":"2016-10-17T12:05:42","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=13662"},"modified":"2016-10-17T12:05:42","modified_gmt":"2016-10-17T12:05:42","slug":"bank-of-america-profit-rises-7-3-on-bond-trading-cost-cuts","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/bank-of-america-profit-rises-7-3-on-bond-trading-cost-cuts.html","title":{"rendered":"Bank of America Profit Rises 7.3% on Bond Trading Cost Cuts"},"content":{"rendered":"

Bank of America Profit Rises 7.3% on Bond Trading Cost Cuts<\/span><\/strong><\/span><\/h2>\n

Bank of America Profit Rises 7.3% on Bond Trading Cost Cuts:-<\/strong> Bank of America Corp., the second-biggest U.S. lender by assets, said third-quarter profit rose 7.3 percent, beating analysts\u2019 estimates, as revenue from fixed-income trading was better than predicted and expenses fell.<\/span><\/p>\n

Net income climbed to $4.96 billion, or 41 cents a share, from $4.62 billion, or 38 cents, a year earlier, the Charlotte, North Carolina-based company said Monday in a statement. Adjusted earnings per share excluding accounting adjustments were 42 cents, beating the 33-cent average estimate of analysts surveyed by Bloomberg.<\/span><\/p>\n

Chief Executive Officer Brian Moynihan has been cutting costs for years while contending with persistently low interest rates. That\u2019s now paying off as Wall Street firms benefit from a mid-year rebound in fixed-income trading and the company moves beyond epic legal claims over mortgages that soured in the financial crisis. Earnings increased in all four of the bank\u2019s major business lines.<\/span><\/p>\n

\u201cWe delivered strong results this quarter by staying true to our strategy of responsible growth and focusing on the quality of the relationships with our customers and clients,\u201d Moynihan, 57, said in the statement.<\/span><\/p>\n

Bank of America climbed 1.5 percent to $16.24 in early trading at 7:08 a.m. in New York. The stock had dropped 4.9 percent this year through Friday, trailing the 2.5 percent decline for the KBW Bank Index of 24 U.S. lenders.<\/span><\/p>\n

Revenue rose 3.1 percent to $21.6 billion. Expenses fell 3.3 percent to $13.5 billion, in line with analysts\u2019 estimates.<\/span><\/p>\n

Fixed-income trading revenue rose 39 percent to $2.77 billion, exceeding the average analyst estimate of $2.2 billion. Equity trading fell 17 percent to $960 million, missing the estimate of $1.2 billion.<\/span><\/p>\n

Investment-banking revenue, which includes dealmaking and underwriting securities, climbed 13 percent to $1.46 billion as debt and equity issuance increased, the bank said. That surpassed the average $1.3 billion estimate from seven analysts surveyed by Bloomberg. Christian Meissner, global head of corporate and investment banking, said last month the third quarter was turning into a better period for deals after a summer lull, and underwriting activity in high-yield debt and leveraged finance was improving.<\/span><\/p>\n

Mortgage Business<\/span><\/strong><\/span><\/p>\n

Consumer-banking profit rose 3.2 percent to $1.81 billion, as mortgage-banking income surged 45 percent to $589 million, topping the $500 million estimate of Oppenheimer & Co. analyst Chris Kotowski.<\/span><\/p>\n

The business line the company calls \u201call other\u201d posted a loss of $182 million compared with profit of $152 million a year earlier. Bank of America took a tax charge of about $350 million for revaluing the company\u2019s deferred tax assets in the U.K.<\/span><\/p>\n

The company revised earnings for recent years on Oct. 4 to reflect a change in the way it accounts for the value of certain securities held in its investment portfolio. Chief Financial Officer Paul Donofrio indicated in July that the new method, bringing the firm in line with Wall Street peers, may reduce swings within the bank\u2019s earnings. That month the company also made another change, dissolving a business segment created in 2011 to house delinquent mortgages.<\/span><\/p>\n

JPMorgan Chase & Co. kicked off the U.S. financial industry\u2019s earnings season Friday, beating analysts\u2019 profit estimates on a 48 percent surge in fixed-income trading as investors speculated on government bonds. Citigroup Inc. surpassed predictions, too, as fixed-income revenue jumped 35 percent, helped by interest-rate and currencies trading. Wells Fargo & Co., contending with a scandal in its consumer business, also beat estimates.<\/span><\/p>\n

Goldman Sachs Group Inc. is set to announce quarterly results on Tuesday, with Morgan Stanley following on Wednesday.<\/span><\/p>\n

Source:-\u00a0http:\/\/www.bloomberg.com\/news\/articles\/2016-10-17\/bank-of-america-profit-rises-7-3-on-cost-cuts-bond-trading<\/span><\/p>\n

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