Bank of America’s second quarter earnings surpassed analysts’ forecast by clocking $5.3 billion profit.
The results come at a time when analysts were expressing concerns about the sluggish share prices and the lackluster performance of late.
The earnings were $2.3 billion a year earlier for the same quarter. The bank earned 45 cents per share which is 19 cents higher than last year figures.
Analysts had pegged a figure of 36 cents per share, and the results have exceeded the predictions.
The bank’s CEO Brian T. Moynihan was in an upbeat mood when he was talking to analysts on a conference call. He said he was not only pleased with the performance but also the fact that expenses are down and revenues high.
The banks revenues have increased by 2% as compared to previous year and had reached $22.3 billion.
Analysts had predicted revenue of $21.3 billion. According to Thomson Reuter’s survey, the second quarter revenues were much better than expected.
Bank Of America has been under pressure like all banks to raise profits in an unstable trading environment with one of the lowest interest rates of all times which has lowered the value of holdings of most banks.
Things started to improve in the second quarter. However, the market is still unstable with results from fixed –income trading couple with equities in rough.
The situation improved with a rise in long-term interest rates in the quarter that helped to improve the results.
Bank of America has been troubled for years by an ever-increasing litigation costs associated with its mortgage problems.
The bank said that expenses decreased by 6% in the second quarter as compared to the previous year.
It excludes litigation costs and the costs of servicing its troubled mortgage portfolio fell by 37 percent.
Investors have been urging for more efforts to bring down the expenses in the latest quarter to offset the effects of low-interest rates.