Bank of America has nearly doubled its quarterly profit in its latest report, and analysts were floored at the results that came out.
Banking giant Bank of America has seen a massive increase in its corporate profit lately, reporting that its second-quarter profits were double that of a year ago, blowing away the assumptions of analysts.
The good results are because of cutting expenses for the most part, but also a huge drop in litigation costs and one-time expenses like adjustments to the value of debt holdings because of a rise an interest rates also drove the profits, causing analysts to be cautious about the good news for the company, according to a New York Times report.
The Charlotte, N.C.-based bank pulled in $5.3 billion during the quarter — a figure that compares nicely from the $2.3 billion it made in a quarter just a year ago. That comes out to 45 cents per share compared to 19 cents per share last year for the same quarter. Analysts had only expected it to hit 36 cents per share, making that quite a nice haul for investors who had bet on Bank of America.
Overhaul, shares were up 3.2 percent on the day, the biggest gain in one day in months. The shares closed at $17.68.
Essentially, revenue was up and expenses took a nosedive, crowed BoA chief executive Brian Moynihan, according to the report in a conference call with analysts.
It’s a big showing for Moynihan, who had been being pushed to show some better results for the banking giant that seeks to emerge from the financial crisis that has mired the banking system ever since the collapse of 2007 and 2008. Mortgage losses from that collapse as well as related litigation have hammered the bank, but that appears to be behind it based on these latest results.
Bank of America has struggled to boost its profits with interest rates so low, as have other big banks. However, the trends are starting to make a turnaround, and an uptick in the longer-term interest rates are helping improve the bottom line.