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Sales at Bank of America improved some 64 per cent to $22.2 billion in the second quarter as commercial lending and credit quality improved. However, even at that pace, the company missed expectations by some $500 million.The Charlotte, N.C., topped bottom line projections, however, earning $2.5 billion, or $0.19 per share. Estimates were for earnings of $0.15 a share.
A year earlier, Bank of America posted a loss of $8.8 billion, or $0.90 per share.
“In a challenging global economy, we still see opportunities to do more with our customers and clients,” Bank of America Chief Brian Moynihan said. “Lending to commercial businesses increased for the sixth straight quarter — with small business lending and commitments up 23 per cent in a year — and consumer credit is in the best shape in years.”
Bank of America says it will generate cost savings of $8 billion through measures it has implemented over the past year. Already, the company has eliminated 12,624 over the last twelve months, now employing 275,460 full-time workers.
The company’s consumer unit weighed on results, with revenue falling $1.4 billion from the year ago period.
Below, a break out of the company’s investment banking performance (from release).
Global Banking reported net income of $1.4 billion, down $515 million from the year-ago quarter, from lower revenues and provision expense benefit partially offset by a decline in noninterest expense. Revenue of $4.3 billion was down 8 per cent from the year-ago quarter, primarily due to lower investment banking fees, the lower rate environment and accretion on certain acquired portfolios.
Global Corporate Banking revenue increased to $1.5 billion in the second quarter of 2012 from $1.4 billion in the year-ago quarter, while Global Commercial Banking revenue declined to $2.0 billion in the second quarter of 2012 from $2.3 billion in the second quarter of 2011. Business Lending revenue was $2.0 billion in the second quarter of 2012, down from $2.2 billion in the year-ago quarter. Treasury Services revenue was $1.5 billion in the second quarter of 2012, compared to $1.6 billion in the second quarter of 2011. Firmwide investment banking fees, including self-led deals, declined to $1.2 billion from $1.7 billion in the year-ago quarter, mainly due to lower underwriting fee revenue.
Average loans and leases increased $7.7 billion, or 3 per cent from the year-ago quarter, due to growth in domestic and international commercial and industrial loans and international trade finance. Average deposits increased $3.4 billion from the prior-year quarter as balances continued to grow from excess market liquidity and limited alternative investment options.
Shares are up 1 per cent in pre-market trade.