Bank Of America Corp (BAC) Makes Lower Provision For Credit Losses
Bank of America Corp (NYSE:BAC) has provided lower provision for credit losses in the fourth quarter compared to the last year. The company indicated that its credit quality remained strong during the December quarter suggesting an improved economy apart from solid risk underwriting.
Bank of America Corp (NYSE:BAC) provided $219 million towards credit losses in the December quarter, which was remarkably down by 35% from $336 million recorded in the year-ago quarter. The company attributed it to quality of credit and the fall of net charge-offs by 44% to $879 million.
The financial services provider said that the drop in net charge-offs were due to improved trends in the portfolio including higher home prices. The company indicated that the reserve release amounted to $660 million in the fourth quarter versus $1.2 billion in the previous year quarter. On a percentage basis, credit quality improved to 44% of net charge-offs from 40%.
Bank of America Corp (NYSE:BAC) said that its non-interest expenses fell to $14.2 billion from $17.3 billion fueled by lower litigation costs and reduced personnel expenditures. Litigation expenses were significantly reduced to $393 million from a whopping $2.3 billion recorded in the prior year fourth quarter. Excluding litigation costs, net non-interest expenses would have been $13.8 billion.
Commenting on the results, the company’s CEO, Brian Moynihan, said that the bank has witnessed solid growth in consumer deposits, as well as loan originations. He said that wealth management client balances advanced to $2.5 trillion at the end of the December quarter.
The CEO said that the company was able to hike its lending to big companies and middle-market. The company also retained its leadership position as far as investment banking was concerned. He cautioned that there was plenty of work to do with tremendous opportunities lying ahead.
The company reported a profit of $3.05 billion or 25 cents a share for the fourth quarter, down from $3.44 billion or 29 cents a share in the year-ago quarter. The results included $1.2 billion or 7 cents a share towards unfavorable charges. Therefore, on an adjusted basis, the bank would have earned 32 cents a share, which was in line with the Street analysts’ expectations.
Bank of America (NYSE:BAC)’s total revenue, excluding DVA/FVA, slipped to $19.58 billion from $22.32 billion in the previous year quarter. Net interest income fell 10.3% to $9.865 billion from $10.999 billion while non-interest income dipped 15% to $9.09 billion from $10.7 billion in the year earlier quarter.
Latest posts by Viraj Shah (see all)
- Tesla Motors Inc (NASDAQ:TSLA)’s Elon Musk Is Going After Semi Truck Industry - November 17, 2017 04:37 AM PDT
- Tesla Motors Inc (NASDAQ:TSLA) Is Not “Hotbed for Racist Behavior” - November 15, 2017 06:58 AM PDT
- Nikola Tesla and Tesla Motors Inc (TSLA) – The Past & Future of the World You Cannot Ignore- Part 1 - May 15, 2017 05:11 AM PDT