Bank of America (BAC) earnings Q2 2020

Brian Moynihan, Bank of America, speaking at the WEF at Davos, January 21, 2020

CNBC

Bank of America posted second-quarter earnings that were bolstered by stronger-than-expected bond trading and investment banking revenue.

The bank said it generated earnings of $3.5 billion, or 37 cents a share, although it wasn’t immediately clear how that compared to the 27 cents expected by analysts surveyed by Refinitiv. Revenue of $22.5 billion edged out analysts’ estimate of $22 billion.

Bank of America is considered by analysts to be the most sensitive of large banks when it comes to changes in interest rates, so they will be keen to hear how the lender is navigating the low rate environment.

In May, Moynihan said that he expected trading revenue to rise by “high single digits,” a figure that would pale next to how rivals performed. At JPMorgan, trading revenue surged 79% to a record $9.7 billion, and Goldman produced a 93% increase in trading revenue to $7.2 billion.

On Tuesday, J.P. Morgan and Citigroup both posted profit that beat analysts’ expectations on strong trading and investment banking results, factors that helped Goldman Sachs┬ánotch its biggest earnings beat in nearly a decade on Wednesday. Wells Fargo posted its first loss since the financial crisis on loan loss reserves.

Bank of America shares have fallen 30% this year, compared with the 34% decline of the KBW Bank Index.

Here’s what Wall Street expected:

Earnings: 27 cents a share, a 64% drop from a year earlier, according to Refinitiv.

Revenue: $22 billion, a 5.3% drop from a year earlier.

Net interest margin: 2.04%, according to FactSet.

Trading revenue: Fixed income $2.63 billion; equities $1.27 billion.

This story is developing. Please check back for updates.

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