Bank of America (BAC), the nation's largest bank by retail deposits, said Thursday its first quarter net income fell 13% from a year ago after trading revenue and interest income fell and it set aside more energy-related loan loss reserves. Net income was $2.7 billion vs. $3.1 billion a year ago. Earnings per share of 21 cents matched the consensus estimate by the analysts who were polled by S&P Global Market Intelligence. Bank of America's net interest income, derived from its loans to consumers and businesses, totaled $9.2 billion vs. $9.4 billion a year ago, reflecting low interest rates that are cutting into the banking industry's bottom line. Shares rose 2.8% to $14.18. They had fallen 21% in the first quarter, which was marked by falling oil prices and stock market volatility. Also, CEO Brian Moynihan signaled cost cuts, which weighed on overall expenses, weren't over. "We're going to keep driving those costs down as we continue to move forward through 2016," he said in a conference call with analysts. JPMorgan (JPM) kicked off the earnings season for the major U.S. banks Wednesday and delivered first-quarter results that beat Wall Street estimates, affirming hopes that consumer banking remains robust amid the solid economic outlook in the U.S. But JPMorgan also raised its credit loss reserves due to bad loans in the oil, gas and mining industries, underscoring the banking industry's troubling exposure to volatile energy prices. JPMorgan's Q1 income falls 6.7% but beats estimates; stock jumps Bank of America, based in Charlotte, N.C., was also similarly afflicted by its exposure to the energy industry. Its credit loss reserves totaled $997 million, up from $765 million a year ago. Revenue at its consumer banking business, the largest business unit, climbed by $242 million to $7.6 billion as loans and deposits rose. The unit's net income rose 22% to $1.8 billion, partly due to a rollback of $156 million in credit loss reserves as credit quality improved. The global banking unit's revenue was flat at $4.4 billion, reflecting higher loan and deposit balances that were offset by falling investment banking fees. Net income fell $301 million to $1.1 billion as it set aside more reserves in anticipation of souring loans. Credit loss reserves rose by $457 million, "driven primarily by increases in energy-related reserves," it said. Average loans and leases grew 14%. But investment banking fees declined 22%. The wealth and investment management unit's revenue fell by $72 million to $4.4 billion as fewer trades and "lower market valuations" sank its noninterest income. But its net income rose 13% to $740 million due to expense management. Revenue for the global markets unit was down by $240 million to $4 billion as sales and trading volume fell and investment banking fees were lower. Net income increased 45% to $984 million. The unit's trading revenue fell 15.5% to $3.3 billion. Total revenue, including net interest income and noninterest income, totaled $19.7 billion, down 6.7%. Analysts estimated $20.3 billion.
Bank of America - 1Q16 profit of $2.7bn, down 13% YoY, after trading revenue and interest income fell. Also, total provisions rose 30% to $997m in the quarter, largely due to potential losses on energy loans. CEO Brian Moynihan hinted at further cost cutting at the bank.