BANK OF America has reported improved second-quarter net income and has exceeded analysts’ estimates on cost-cutting, announcing the equivalent of 20,000 staff had left the company in the last year.
Net income of $2.5 billion was up from a loss of $8.8 billion in the same period last year. Earnings per share of 19 cents beat analysts’ estimates of 15 cents. Net revenue rose from $13.5 billion a year ago to $22.2 billion. The results were flattered by the comparable period when B of A recorded an exceptional $18.2 billion charge for issues related to the bad mortgage loans written before the crisis, which have dogged the bank for the past four years.
B of A made progress with its capital levels, another persistent problem that has led to a Federal Reserve ban on increased share buybacks and dividends. Its common equity to risk-weighted assets ratio was 8.1 per cent, ahead of target and better than some large peers.
It also announced it would achieve $8 billion in annualised cost savings by mid-2015 after a strategic review known as “New BAC”, the bulk of which involves heavy job losses. – Copyright The Financial Times Limited 2012
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