Bank of America (BAC) posts US$6.2 bn net income for Q2 FY-22

Follow us on Google News:
 Bank of America (BAC) posts US$6.2 bn net income for Q2 FY-22
Image source: © Tiraspr | Megapixl.com

Highlights:

  • Bank of America Corp (NYSE: BAC) reports a 34% drop in the 2nd quarter profit.
  • The drop in BAC profit is caused by a slump in dealmaking due to market turmoil.
  • BAC’s net interest expense grew 6% to US$22.7 billion in the reported quarter. 

The second-largest US bank by assets, Bank of America Corp (NYSE: BAC), reported a second-quarter net income of US$6.2 billion or US$0.73 per diluted share on Monday.

It was US$9.2 billion in the second quarter of the previous year.

The nearly 34% drop in the second-quarter profit is due to a slump in investment banking revenue as dealmaking activity was at a fraction of the previous year's deals.

Last year saw dealmaking activities touch record levels. Wall Street investment bankers did brisk business last year with overflowing deals. However, due to market volatility, geopolitical crisis, and risk-averse sentiment in the market, there was a slump in the first half of 2022.

BAC’s pretax income plunged 14% to US$6.9 billion compared to US$8.0 billion in the year-ago quarter.

Its total revenue, net of interest expense, came in at US$22.7 billion against US$21.5 billion in the same period in 2021.

Bank of America (BAC) posts US$6.2 Bn net income for Q2 FY-22© Robwilson39 | Megapixl.com

BAC revenue impacted by the global downturn

Bank of America’s profit applicable to common shareholders dropped to US$5.93 billion in the reported quarter.  A year earlier, it was US$8.96 billion, or US$1.03 per share.

As companies pull the plugs on dealmaking, BAC’s investment banking fees fell 47% to US$1.1 billion, the report mentioned.

Revenue in the quarter, net of interest expense, rose 6% to US$22.7 billion vs US$21.5 in 2021 the same quarter.

The US Federal Reserve’s continual hiking of interest rates to quell the decades-high inflation has resulted in higher profits for banks. Although it risks a recession, banks always thrive in a high-interest rate scenario.

Bank of America's net interest income surged 22% to US$12.4 billion. It measures the difference between the interest earned on loans and the amount paid out on deposits. In the same quarter in 2021, it was US$10.2.

Bottom line:

Bank of America’s consumer banking unit reported a revenue jump of 12% to US$9.1 billion in the second quarter. BAC's combined credit and debit card spending grew 11% to US$220.5 billion compared to the first quarter of this fiscal year. YoY, it was up 10%.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.

Featured Articles