(RTTNews) - Financial services firm Bank of America Corp. (BAC: News ) Friday reported lower profit for the second quarter, hurt primarily by higher provision for credit losses and merger and restructuring charges. Strong performance of wholesale capital markets businesses and home loans led a significant rise in the company's revenues for the quarter. The bank also warned that continuing challenges in the global economy will affect its performance for the remainder of the year and into 2010.
Bank of America's second-quarter net income was $3.22 billion, down from $3.41 billion in the same quarter last year. Net income applicable to common shareholders declined to $2.42 billion from $3.22 billion in the year-ago quarter. On a per-share basis, the bank's net earnings were $0.33, compared with $0.72 in the previous year.
Analysts polled by Thomson Reuters expected the company to report earnings of $0.28 per share for the quarter. Analysts' estimates typically exclude special items.Pretax, pre-provision income on a fully-taxable equivalent basis totaled $16.1 billion, up from $11.1 billion a year earlier.
The bank's total revenue, net of interest expense on a fully taxable-equivalent basis, rose 60% to $33.1 billion from $20.7 billion a year ago. Total revenue net of interest expense was $32.77 billion, up from $20.41 billion in the same quarter last year. Sixteen analysts had consensus revenue estimate of $33.10 billion for the quarter.
The bank said that results were driven by continued strong revenue performance in the wholesale capital markets businesses as well as in home loans, complemented by the previously announced gains on the sale of China Construction Bank, or CCB, shares and the sale of the company's merchant processing business to a joint venture.
The positives, however, were somewhat offset by continuing high credit costs, including additions to the reserve for loan and lease losses, as well as significant negative credit valuation adjustments on certain liabilities including the Merrill Lynch structured notes and the impact of a special Federal Deposit Insurance Corp., or FDIC, assessment.
Bank of America also reported a 9% rise in its second-quarter net interest income on a fully taxable-equivalent basis to $11.9 billion from $10.9 billion in the second quarter of 2008. The company attributed the net interest income growth to an improved rate environment and the addition of Countrywide and Merrill Lynch.
Non-interest income rose to $21.1 billion from $9.8 billion last year, including a $3.8 billion pretax gain from the completed sale of the merchant processing business to a joint venture. The non-interest income growth was also driven by a $5.3 billion pretax gain on the sale of CCB shares. Bank of America continues to own approximately 11% of the common shares of CCB.
Bank of America's second-quarter net income was $3.22 billion, down from $3.41 billion in the same quarter last year. Net income applicable to common shareholders declined to $2.42 billion from $3.22 billion in the year-ago quarter. On a per-share basis, the bank's net earnings were $0.33, compared with $0.72 in the previous year.
Analysts polled by Thomson Reuters expected the company to report earnings of $0.28 per share for the quarter. Analysts' estimates typically exclude special items.Pretax, pre-provision income on a fully-taxable equivalent basis totaled $16.1 billion, up from $11.1 billion a year earlier.
The bank's total revenue, net of interest expense on a fully taxable-equivalent basis, rose 60% to $33.1 billion from $20.7 billion a year ago. Total revenue net of interest expense was $32.77 billion, up from $20.41 billion in the same quarter last year. Sixteen analysts had consensus revenue estimate of $33.10 billion for the quarter.
The bank said that results were driven by continued strong revenue performance in the wholesale capital markets businesses as well as in home loans, complemented by the previously announced gains on the sale of China Construction Bank, or CCB, shares and the sale of the company's merchant processing business to a joint venture.
The positives, however, were somewhat offset by continuing high credit costs, including additions to the reserve for loan and lease losses, as well as significant negative credit valuation adjustments on certain liabilities including the Merrill Lynch structured notes and the impact of a special Federal Deposit Insurance Corp., or FDIC, assessment.
Bank of America also reported a 9% rise in its second-quarter net interest income on a fully taxable-equivalent basis to $11.9 billion from $10.9 billion in the second quarter of 2008. The company attributed the net interest income growth to an improved rate environment and the addition of Countrywide and Merrill Lynch.
Non-interest income rose to $21.1 billion from $9.8 billion last year, including a $3.8 billion pretax gain from the completed sale of the merchant processing business to a joint venture. The non-interest income growth was also driven by a $5.3 billion pretax gain on the sale of CCB shares. Bank of America continues to own approximately 11% of the common shares of CCB.
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