Bank of America profit falls 21% amid wealth-management dip

Bank of America, the second-biggest US bank by assets, said second-quarter profit fell 21 per cent as the firm took an accounting charge and posted a decline in wealth-management revenue.

Net income dropped to $4.23 billion (€3.82 billion), or 36 cents a share, from $5.13 billion, or 43 cents, a year earlier, the Charlotte, North Carolina-based lender said on Monday. The average estimate of analysts surveyed by Bloomberg was for earnings per-share of 33 cents.

Revenue fell 7.1 per cent to $20.4 billion. Global wealth-management revenue declined 2.4 per cent to $4.5 billion. The bank reaped $2.62 billion from bond trading, a 22 per cent increase, and $1.09 billion from equities, a 7.6 per cent drop.

Legal costs

Chief executive officer Brian T Moynihan (56) spent most of his tenure wrestling with legal costs tied to his predecessor's acquisitions of Countrywide Financial and Merrill Lynch. Last week, the bank dissolved the business segment it created in 2011 to house delinquent mortgage loans, putting more distance between the firm and its woes from the financial crisis.

Bank of America has focused on cutting expenses while persistently low interest rates crimp revenue and profit.

Mr Moynihan said in April after reporting first-quarter results that showed better-than-expected cost reductions that "there's a lot more to do". Chief operating officer Thomas Montag (59) issued an edict to trading and investment-banking managers this year to lower costs.

JPMorgan, the largest US bank by assets, posted second-quarter profit last week that beat analysts' estimates as fixed-income trading revenue and loan growth increased. Profit declined at Citigroup and Wells Fargo.

Bloomberg