Bank of America’s earnings soar 70 percent
NEW YORK — Bank of America says its second-quarter profits soared, helped largely by cost-cutting.
The results beat analysts’ expectations. The bank earned $3.6 billion in the quarter after payments to preferred shareholders. That was up 70 percent from $2.1 billion a year ago.
Per share, that worked out to 32 cents. Analysts polled by FactSet had expected 25 cents per share.
Bank of America, based in Charlotte, N.C., has been slimming down and cutting jobs since CEO Brian Moynihan took over at the beginning of 2010, a strategy meant to make the bank easier to manage and to escape potential extra scrutiny from regulators. In the second quarter, the bank slashed expenses about 6 percent, to $16 billion from $17 billion.
The bank benefited from lower litigation expenses, having already settled several high-profile lawsuits related to its mortgage unit earlier this year. It also was able to shrink the unit that services troubled mortgages. The bank cut about 18,300 jobs over the year, or nearly 7 percent.
Investment banking and wealth management powered Bank of America’s earnings more than its consumer business did. The bank funded nearly $27 billion in home mortgages and home equity loans, a jump from 41 percent a year ago, though the loss in its overall mortgage business widened.
Total revenue was $22.9 billion after stripping out one-time charges, up 3 percent from a year ago. That was better than the $22.8 billion expected by analysts polled by FactSet.
Bank of America’s stock was up nearly 1 percent in premarket trading, rising 12 cents to $14.04.