Bank Of America CEO Brian Moynihan is interviewed by Jack Otter during “Barron’s Roundtable” at Fox Business Network Studios on January 9, 2020 in New York City.
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Bank of America is expected to report second-quarter earnings before the opening bell on Monday.
Here’s what Wall Street expects:
- Earnings: 75 cents a share, according to Refinitiv.
- Revenue: $22.67 billion, 5% higher than a year earlier.
- Net interest income: $12.37 billion, according to StreetAccount
- Trading Revenue: Fixed Income $2.33 Billion, Stocks $1.73 Billion
- Investment banking: $1.24 billion
Bank of America is arguably one of the big beneficiaries of the rate hike, but will that be enough to offset the slump in the investment banking sector?
That’s the following question JPMorgan Chase, Morgan Stanley and Citigroup All revealed a sharp drop in second-quarter consulting revenue.
Bank of America, led by Chief Executive Officer Brian Moynihan since 2010, has been favorable as rising interest rates and rebounding loan growth boosted earnings. But bank shares have fallen this year on fears that high inflation will trigger a recession, leading to higher defaults.
Furthermore, a broad-based decline in financial assets has begun to show up in banking results for the quarter, with Wells Fargo said that “market conditions” forced it to post $576 million decrease in equity ownership.
JP Morgan said last week it had $257 million in bridge loans for leveraged buyout customers. For his part, Bank of America’s CFO, Alastair Borthwick, said last month that the bank would likely apply for a $150 million loan against its acquisition loans.
Bank of America shares are down 28% this year through Friday, worse than the 16% drop in Bank Index KBW.
Last week, JPMorgan and Wells Fargo announced second-quarter earnings refuse because banks spend more money on loans that are expected to be at a loss, while Morgan Stanley Disappointed after one the slowdown is bigger than expected in the investment banking sector. Citigroup is the only company top expectations for revenue as it benefits from rising rates and strong trading results.
This story is evolving. Please check back for updates.
