Bank of America profit surges on reserve release, revenue slips
FILE PHOTO: A Bank of America logo is pictured in the Manhattan borough of New York City, New York, U.S., January 30, 2019. REUTERS/Carlo Allegri
Bank of America Corp reported a 173% jump in second-quarter profit on Wednesday as it released reserves it had set aside last year at the height of the pandemic, but revenues remained weak and the bank flagged high expenses.
The bank’s net income applicable to common shareholders rose to $8.96 billion, or $1.03 per share, from $3.28 billion, or 37 cents per share, a year earlier.
Analysts on average had expected a profit of 77 cents per share, according to IBES estimate from Refinitiv.
The Federal Reserve last year brought in ultra-low interest rates to allow for a more rapid recovery from the pandemic-induced recession. Such low rates eat into the income of lenders like Bank of America, which make profit from the difference between what they earn on loans and pay out on deposits.