Bank of America Q1 profit falls
Bank of America has reported a sharp fall in its profit for the March quarter, as its revenue came under pressure due to a slump in bond and stock trading amid concerns over global economic growth.
The company posted a 13% fall in its net income to $2.68bn in the first quarter this year compared to $3.1bn in the same quarter last year.
The bank's trading revenue dropped to $3.29bn in the quarter from $3.89bn recorded in the corresponding quarter in 2015.
Bank of America, the second largest lender in the US in terms of assets, increased its provisions for bad loans by 30% to $997m in the January-March quarter, mainly as a result on rising worries over a slump in oil industry.
While its revenue for the quarter fell to $20.9bn from $21.42bn.a year ago, net interest income declined to $9.17bn from $9.41bn..
However, the bank's non-interest expenses dropped by 6.4% to $14.82bn, as a result of 28% decrease in costs in its legacy assets and servicing unit.
Bank of America CEO Brian Moynihan said: "This quarter, we benefited from good consumer and commercial banking activity. Our business segments earned $4.5 billion, up 16 percent from the year-ago quarter.
"This was partially offset by valuation adjustments from lower long-term interest rates and annual compensation expenses"
Energy loans offered by the bank rose to $21.85bn in the first quarter, from $21.26bn in the December last year.
Bank of America CFO Paul Donofrio said: "In a challenging and volatile environment, we stayed true to our strategy this quarter.
"We grew loans and deposits, increased core net interest income and improved an already strong and highly liquid balance sheet, increasing tangible book value per share by 9%.
"We also reduced noninterest expense by $1bn, or 6%, as we continued to focus on improving operating leverage."