Bank of America (BofA), a multinational investment bank and financial services holding company, recorded a 12.6% decline in its net income for the second quarter of 2022.
The multinational’s Q2 net income dropped to $6.1 billion from the $7.1 billion posted at the end of the first quarter of this year.
Additionally, the company’s expected earnings per share (EPS) to drop 9% from $0.80 to $0.73.
These details are contained in the holding company’s released financial results for the second quarter of 2022.
The company said its net interest income rose 22% to $12.4 billion in the recently ended quarter.
Moreover, BofA’s average deposits increased $123 billion or 7% to $2 trillion.
Global & Consumer Banking
BofA produced a net income of $1.5 billion in its global banking activities during Q2. This is an 11.7% drop from the $1.7 billion seen during the first quarter.
On the other hand, the holding company’s net income from consumer banking came in at $2.9 billion, which is a 3.3% drop from Q1’s $3 billion.
The company said it recorded average deposits of more than $1 trillion, noting that this is a $99 billion or 10% increase.
In Q2, the bank added 241,000 net Consumer checking accounts. This is a 6% increase from Q1 during which it added 228,000 net Consumer checking accounts.
“Our strong organic growth engine once again was evident in new account openings for checking, consumer investments and small businesses, as well as net new Merrill and Private Bank households and new commercial banking customers,” said the Chair and CEO, Brian Moynihan, explaining the growth.
Moynihan added: “This solid client activity across our businesses, coupled with higher interest rates, drove strong net interest income growth and allowed us to perform well in a weakened capital markets environment.”
The CEO noted that the franchise grew its revenue 6% and delivered its fourth straight quarter of operating leverage.
Global Wealth and Investment Management
BofA’s Global Wealth and Investment Management’s net income slumped 9% to $1.2 billion. It recorded $1.1 billion in this category during the first quarter.
The holding company posted client balances of $3.4 trillion. It said this balance went down by 8% or $286 billion. This was driven by lower market valuations but was partially offset by net client flows, BofA noted.
At the end of the quarter, BofA said it had $1.4 trillion in assets under management for its clients.
It added that $53 billion of AUM flows have come in since the second quarter of last year.
Global Markets
BofA’s Global Markets fell by 37.5% from $1.6 billion in Q1 to $1 billion at the end of June.
The multinational said its sales and trading revenue rose 17% to $4.2 billion, including net debit valuation adjustment (DVA) gains of $158 million.
However, the company recorded a sales and trading revenue of $4.7 billion including a net DVA gain of $69 million during the first quarter.
On top of that, the holding company’s Fixed Income Currencies and Commodities (FICC) dropped by 7.4% to $2.5 billion. In Q1, FICC came in at $2.7 billion.
Furthermore, BofA’s Equities decreased by 15% from the first quarter’s $2 billion to $1.7 billion at the end of June.
‘Responsible Growth Strategy’
BofA’s Chief Financial Officer, Alastair Borthwick, noted that despite expenses recognized for certain regulatory matters in the quarter, the franchise was able to hold expenses flat to the prior quarter.
This previous quarter included seasonally higher compensation expenses, Borthwick added.
“Second quarter results once again demonstrate how our Responsible Growth strategy and diversified business model delivers for customers, clients, employees, shareholders and the communities we serve even in changing and challenging markets,” Borthwick said.
