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US-BANKING-EARNINGS-BofA
Strong consumer business boosts Bank of America earnings
NEW YORK, July 17, 2019 (BSS/AFP) – Bank of America scored record profits in
the second quarter, as strong consumer banking results offset a decline in
earnings from trading worldwide.
Bank of America, the second biggest US bank by assets, reported Wednesday
that profits jumped 10 percent from last year to $7.1 billion in profits,
setting a new record.
Revenues rose 2.4 percent to $23.1 billion.
The bank notched sizeable increases in loans and deposits and offered an
upbeat appraisal of the US economy.
“Our view of the economy reflects the activity by the one-in-two American
households we serve, which points to a steadily growing economy,” chief
executive Bryan Moynihan said.
“We see solid consumer activity across the board, with spending by Bank of
America consumers up five percent this quarter over the second quarter of
last year.”
The bank posted higher profits in its consumer segments thanks to a jump in
net interest income, the difference between the interest rates it charges for
loans and the rate it pays for deposits.
However, profits in this business could be challenged in the upcoming shift
in Federal Reserve monetary policy.
The Fed raised the benchmark borrowing rate last year, but it seen as
virtually certain to backtrack and make a cut later this month.
The bank’s chief financial officer, Paul Donofrio, cited evolving monetary
policy as one factor that led to lower trading volumes, which weighed on
profits in global markets.
“There was just less activity,” Donofrio told reporters on a conference
call. “You probably just need to see a little more confidence about global
growth. It would help to clear up some of the concerns people have about
trade.”
Shares of Bank of America dipped 0.3 percent to $28.91 in pre-market
trading.
BSS/AFP/SR/2000 HRS