- A $700M increase in net interest income certainly helped Bank of America's (NYSE:BAC) Q1, but CEO Brian Moynihan reminds that 60% of the bank's revenue growth last quarter was from non-interest sources (like trading).
- Investors, however, tend to pay less for trading revenues which can be rather lumpy.
- Turning to expenses, the bank - for now - is sticking with its promise to cut another $5B in annual expenses by 2018. Trouble is, with business growing, one would expect expenses to have to go up at least somewhat. Sure enough, noninterest expenses in Q1 of $14.848B were up a hair from a year earlier.
- CFO Paul Donofrio reminds that the expense promise was based on the economic environment at that time. "If things get better, we'd have to adjust."
- The good news on earnings overall and trading in particular has seemingly been priced in thanks to the results from JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) last week, not to mention a 40% advance in BofA over the last six months. After an early pop, shares are lower by 0.5% at current writing.
- WSJ blog
- Earnings call slides
- Previously: Surge in trading revenue boosts BofA's quarter (April 18)
Original article