Bank of America Revenues Rise on Strong Consumer, Profit Falls On Weak Business Deals

Scott Peters
18 Jul, 2022
New York City

Bank of America said its latest quarterly results benefited from the rising rate environment. 

Bank of America said revenues in the second quarter ending in June net of interest expenses, increased 6% to $22.7 billion.

Net income declined to $5.9 billion or 73 cents a diluted share from $8.9 billion or $1.03 a diluted share. 

The bank also took a charge of $523 million for the provision of credit losses. 

Total loans and leases at the end of the quarter increased to $1.03 trillion from $918 billion a year ago. 

Total deposits increased to $1.989 trillion from $1.909 trillion a year ago. 

Non-performing loans declined to $4.1 billion or 0.41% loan loss ratio from $4.9 billion or 0.54% ratio from a year ago. 

 

Consumer Banking 

Consumer banking segment revenues increased 12% to $9.1 billion but net income declined 5% to $2.9 billion.

Net income was impacted by higher credit loss provision of $350 billion on loan growth and dampened macroeconomic outlook. 

At the end of the quarter, the bank added 241,000 net new consumer accounts totaling 35.1 million and business accounts increased 5% to 3.7 million. 

Account balances increased 4% to $1.6 trillion and combined credit and debit card spending increased 10% to $221 billion, 17% increase in credit card and 6% in debit card spending. 

Average credit card outstanding balance increased to $81.0 billion from $73.4 billion a year ago. 

 

Global Wealth and Investment Management 

Revenues increased 7% to $5.4 billion on higher interest rates and higher balances. 

Assets under management decreased 8% to $3.4 trillion reflecting lower market valuation and offset by new asset flows of $53 billion. 

Merrill Lynch wealth management unit added 4,500 new household clients and client balances were $2.8 trillion with $1.1 trillion in assets under management. 

Total investment banking fees decreased 47% or $994 million to $1.1 billion.

 

Global Banking 

Revenues decreased 2% to $5.0 billion reflecting lower investment banking fees, mark-to-market losses related to leveraged finance positions and lower leasing-related revenue. 

These were partially offset by higher net interest income from the benefit of higher interest rates and strong loan growth. 

Total investment banking fees (excl. self-led) decreased $994 million, or 47%, to $1.1 billion.

 

Global Markets 

Revenues decreased 5% to $4.5 billion reflecting lower investment banking fees and mark-to-market losses related to leveraged finance positions, partially offset by higher sales and trading revenue. 

Sales and trading revenue increased 17% to $4.2 billion driven by 19% increase in fixed income, commodities and currencies trading to $2.3 billion and 2% rise in equities trading to $1.7 billion. 

 

Company and Stock

Bank of America increased 1.1% to $32.64 and extended this year's loss to 30.1%. 

Bank of America operates 3,984 centers and the bank's investment units has 650 research analysts covering 3,400 companies, 1,140 corporate bond issuers across 56 economies and 24 industries.