Bank of America profits jump in first quarter

REUTERS: Bank of America Corp reported a stronger-than-expected 70 percent rise in second-quarter profit, helped by higher revenue from equities sales and trading and a drop in expenses.

Net income applicable to common shareholders rose to US $ 3.57 billion, or 32 cents per share, from US $ 2.10 billion, or 19 cents per share, a year earlier. Revenue, net of interest expense, rose 3.5 percent to US $ 22.73 billion.

Analysts on average had expected the second-biggest U.S. bank by assets to earn 25 cents per share, according to Thomson Reuters I/B/E/S.

Bank of America shares were up 1 percent at US $ 14.05 before the bell.

The bank’s operating expenses fell to US $ 16.02 billion from US $ 17.05 billion in the same quarter last year.

Cost-cutting has been a priority for Chief Executive Brian Moynihan, who took charge in 2010.

Bank of America unveiled an initiative in 2011 that aims to save US $ 8 billion a year and has set a goal of achieving US $ 1.5 billion in savings per quarter by the fourth quarter of 2013.

Sales and trading revenue in the bank’s global markets division rose 17 percent to US $ 4.19 billion, excluding an accounting adjustment.

Revenue in the global banking division rose 6 percent to US $ 4.14 billion, driven by a 24 percent rise in revenue from investment banking fees. Revenue in the consumer and business banking division was little changed at US $ 7.43 billion, while revenue from the global wealth and investment management business increased 10 percent to US $ 4.50 billion on higher asset management fees.