Bank of America, Citigroup post declines in profit
The banks beat expectations, but shares of both companies fall.
Bank of America said second-quarter net income fell 3% to $3.12 billion, or 28 cents per share before preferred dividends, from $3.22 billion, or 33 cents per share, in the same period a year earlier. Analysts had been looking for 22 cents per share.
Total revenue net of interest expense was $29.2 billion, down from $32.8 billion and missing expectations for $29.6 billion.
B of A shares were down 95 cents, or 6.2%, to $14.44.
The bank's provision for credit losses fell to $8.11 billion from $13.38 billion in the year-ago quarter. Net charge-offs rose to $9.56 billion from $8.7 billion.
Bank of America ended the second quarter with a 10.67% Tier 1 capital ratio, compared with 11.93% a year ago. B of A paid back the $45 billion in government loans in December.
Citigroup earned $2.7 billion, or 9 cents per share, down from $4.28 billion, or 49 cents per share, a year earlier. Analysts had expected a nickel per share.
Total revenue net of interest expense fell to $22.1 billion from $30 billion, missing expectations for $22.4 billion. The drop was due in part to a decline in revenue at the bank's Citi Holdings unit.
Fixed-income trading revenue slumped 31% to $3.7 billion from the first quarter, and stock-trading revenue tumbled 46% to $652 million. Investment-banking revenue fell 36% to $674 million.
Loan-loss provisions were $6.67 billion in the second quarter, down from $12.68 billion last year and $8.62 billion in the first quarter. Net credit losses fell to $7.96 billion from $11.47 billion last year and $8.38 billion in the previous quarter.
"While the market environment lowered revenues in securities and banking, credit improved for the fourth consecutive quarter," CEO Vikram Pandit said in a statement. "We continue to reduce the size of Citi Holdings, and it now makes up less than a quarter of Citigroup's balance sheet."
Citigroup shares were down 19 cents, or 4.6%, to $3.97.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The major averages finished the Tuesday session near their lows with the Russell 2000 (-1.0%) leading the slide. The S&P 500 lost 0.5% with nine sectors ending in the red.
Equities indices started the day with modest gains and spent the first two hours of action in the neighborhood of their flat lines. Although the early trade lacked clear sector leadership, that could have been overlooked due to the strength among heavily-weighted sectors like health care (-0.3%), ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'