As per latest information revealed by Bank of America Corp., it had dropped profit in its first Q due to a great plunge in trading revenue alongside bearish interest rate dragging. Last year’s profit was the biggest in nearly a decade for Bank of America, but revenue had dropped in both years, i.e. 2015 and 2014.
The profit reported by Charlotte, N.C.-based bank BAC, is $2.68 billion, i.e. 21 cents/share – a bearish estimate generated as comparison to $3.1 billion, i.e. 25 cents/share in the share period, last year. Moreover, analysts at Reuters had expected earnings worth 20 cents/share.
Similarly, as for revenue, there had been a bear estimate of $19.7 billion after an accounting adjustment. That fell short of the adjusted $20.3 billion expected by analysts. Revenue was flat or down in three out of the bank’s four main operating units.
Exclusive report laid forward by Wall Street Journal, reveals its share to have dropped 1% in PREMARKET TRADING after rising nearly 4% a day before.
INSIGHT: Over the last five years, Bank of America shares are roughly flat, compared with a rise of about 37% in shares of J.P. Morgan Chase & Co.
The bank had $21.85 billion in energy loans, up from $21.26 billion in the previous Q, though the bank has committed another $21.65 billion in loans that energy companies could tap if they choose. It set aside an additional $525 million to cover potential energy loan losses.
“In quarters like this, revenue is going to be challenged,” said Bank of America Chief Financial Officer Paul Donofrio on a conference call in which he referenced low rates and volatile markets.
This year might bring in something good for Bank of America’s fortune – which has been dogged by legal fees and problems with the Federal Reserve’s annual test of banks’ financial health – as what Chairman and Chief Executive, Brian Moynihan foresees