The Banking and Strategy Initiative

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Bank Results Season: The last positive Surprise is in (Bank of America reports Q2 2012)

LOS ANGELES, CA - SEPTEMBER 29:  Norman Rothba...

LOS ANGELES, CA – SEPTEMBER 29: Norman Rothbaum a customer of bank of America uses a Bank of America ATM on September 29, 2011 in Los Angeles, California. Bank of America annouced its plans to start charging a $5 monthly fee for customers using their debit card for purchases starting early in 2012. (Image credit: Getty Images via @daylife)

It has been a week full of positive surprises so the shocker on the headline is just for reminding oneself that Morgan Stanley is the one candidate which makes you think of the word “Underperformance” esp this quarter when Trading stayed down and Facebook IPO raised some issues for the Digital IPO team at the pretenders.

Bank of America’s progress has been slow and painful, this quarter including deleveraging its debt by a record $53 B and including a sequential rise of 18% in mortgage originations. The B3T1C (Basel 3 Tier I Common) Capital Ratio is a surprising 8.1% though in Basel 1 terms it is ell behind others yet at 11.24% perhaps because at least some of it outscores the Two big Wall Street firms at JP Morgan and Goldman Sachs in Traditional sources of Debt and simple common equity injections form the government helping the RWA score

Net interest income is down sequentially at $9.55 B but overall revenues virtually identical at $22B. The reduction in Net interest expenses though wrote over $2 B in profits directly to the bottomline as the $45 B Housing settlement and legal settlement provisionds took their toll on the Bank’s income statements for the last 4 quarters. The $2.5 B  profit for thequarter brought the smiles back at Charlotte as the bank totted up the par $3 B in Net income for the half year and a $44.2B in revenues right next to JP Morgan.

Tangible Book has moved up to $13 per share. The 11.51 M shares outstanding skew the pitch for the bank. attrition has reached 150 branches, 1600 ATMs and 12,500 odd emplyees in a year since Project NEW BAC was launched in April 2011.

Retail banking (RFS) service charges and Card income still totted up $3.5 B in the quarter, income from Card sincreasing by more than 5% sequentially Brokerage and investment Banking brought in an identical $4B and Mortgage Banking also scored an identical $1.66B this quarter.

Provisions were down another 25% sequentially to $1.77B and personnel expenses down 13% sequentially to $8.7 B Earnings for the quarter improved to 19 cents for the quarter (Ave shares outstanding).

Incl refinancing thst still made up 4 in 5 mortgages , the bank added 72,000 new customers in Funded First mortgages for $18B in Mortgage lending, and $68B in Commercial loans ( excl CRE) PIIGs sexposure is $9.6 B net and Balance sheet derivatives under $60 B.




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