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.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
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