Bank of America Profit Soars 63 percent
Bank of America issued its second-quarter results Wednesday, posting a 63 percent increase in profit that outpaced Wall Street estimates thanks to CEO Brian Moynihan’s aggressive turnaround plans and successful cost-trimming moves. In the three months ended June 30th, the nation’s second-largest bank earned $4 billion, or 32 cents a share, up 63 percent from the year-ago period’s figures. Analysts in a recent FactSet survey had projected earnings of just 25 cents a share. Overall revenue, meanwhile, rose from $22 billion a year ago to $22.9 billion, just ahead of the $22.8 billion the FactSet analysts had predicted. Investors welcomed the report, pushing the bank’s shares up 3.5 percent by 12:30 PM ET.
Bank of America’s solid quarter came largely as the result of steep cost-cutting maneuvers implemented since CEO Brian Moynihan took the helm in 2010. In the April to June quarter, BAC managed to trim its expenses by 6 percent through these moves, designed to reduce scrutiny on the bank and make it easier to manage. The bank has now reduced its workforce by nearly 7 percent to 257,000 employees, down almost 11 percent from its peak workforce of 289,000 in early 2011. The firm has also benefited from shuttering unprofitable branches, closing 260 since the beginning of the year. The bank currently operates 5,300 branches, but plans to continue trimming that number down moving forward.