Bank of America (NYSE: BAC) reported its second quarter earnings and topped analysts’ estimates in both revenue and earnings. Shares were trading 3.7% higher late Monday.
Bank of America reported an EPS of USD 0.63, beating analyst expectations of USD 0.57, a 43% increase from last year. Q2 earnings surged 33% to USD 6.8 Billion, topping the USD 5.92 Billion estimate by analysts.
According to CFO Paul M. Donofrio, this is the 14th consecutive quarter of positive operating leverage.
The bank reported a revenue decrease of 1%, to USD 22.6 Billion compared to Q2 in 2017 which generated a revenue of USD 22.8 Billion, including a USD 793 Million pretax gain on the sale of its non-U.S. consumer card business. Revenue is up 3% when excluding the sale of the card business last year. Merrill Edge brokerage assets are up 20%.
“Solid operating leverage and client activity drove earnings higher this quarter. Responsible growth continued to deliver as a driver for every area of the company. We grew consumer and commercial loans; we grew deposits; we grew assets within our Merrill Edge business; we generated more net new households in Merrill Lynch; and we supported more institutional client activity” said Brian Moynihan, CEO and Chairman of Bank of America. “All of this while we continued to invest in our businesses and began an additional USD 500 Million technology investment, which we intend to spend over the next several quarters, due to the benefits we received from tax reform.”
The bank’s segments all saw growth, reporting an 8% increase in revenue, to USD 9.2 Billion, a 7% increase in loans, to USD 281 Billion, deposits up 5%, to USD 688 Billion, and combined credit and debit spending up 8% to USD 148 Billion in Consumer Banking.
Global Wealth and Investment Management reported a record USD 2.8 Trillion in client balances. Loans also increased 7% to USD 161 Billion. Global Banking reported a revenue of USD 4.9 Billion, a 2% decrease, while loans increased by 3% and deposits increased 8%.
The Global Markets segment reported a net income increase to USD 1.1 Billion, or 34%, and revenue increased USD 274 Million, or 7% to USD 4.2 Billion, driven by higher sales and trading revenue. Equities went up 17%, to USD 1.3 Billion and FICC rose 2% to USD 2.3 Billion.