Bank of America has reported one of the best quarters and one of the best first halves of net income in the company’s history, according to Chair and CEO Brian Moynihan.
Speaking on the Earnings Conference Call, he said: “Our results this quarter once again include solid performance on things we control by delivering organic growth and operating leverage.”
BofA’s highlights for the second quarter ended June 30, 2023, include Net Income of $7.4 Billion; EPS of $0.88, up 21% YoY Revenue Grew 11% led by 14% Improvement in Net Interest Income to $14.2 Billion; Eighth Consecutive Quarter of Operating Leverage(A); and CET1 Ratio of 11.6%.
“We also produced strong returns for our shareholders with a return on tangible common equity at 15.5%, continuing the streak of many quarters at that level or above,” Moynihan said.
He highlighted the global markets area, which saw one of the highest second quarters for sales and trading in the Bank’s history.
In Global Markets, sales and trading revenue of $4.3 billion increased 3%. Fixed income, currencies, and commodities (FICC) revenue increased 7%, to $2.7 billion, driven by strong trading performance in currencies, emerging markets interest rates, and secured financing, as well as improved trading in credit and mortgage products, partially offset by weakness in commodities. Equities revenue decreased 2%, to $1.6 billion, driven primarily by weaker trading performance in derivatives, partially offset by an increase in client financing activities.
The continued themes of inflation, geopolitical tensions, and central banks changing monetary policies around the globe, along with this quarter’s debt ceiling concerns, continued to impact both the bond and equity markets, according to Moynihan.
“As a result, it was a quarter where we saw strong performance in both our macro and micro trading businesses,” he added.
Moynihan noted that investments made in technology have enabled the Bank to grow industry-leading positions in digital tools while enabling their clients to do “great things” and making the Bank more efficient.
For example, customer uses of Erika, a virtual voice assistant, continues to beat expectations, he said.
According to Moynihan, this was an early application of natural language processing and artificial intelligence.
Chief Financial Officer Alastair Borthwick added that the Bank’s focus remains on growing their businesses organically by deepening existing client relationships, establishing new relationships, and driving operating leverage.
We did that again in the second quarter, producing our eighth consecutive quarter of operating leverage. We delivered strong top line and bottom line growth with net income growing 19% from Q2-22.
“Asset quality and the overall health of the U.S. consumer remained strong. Total loss rates remained below pre-pandemic levels. Our balance sheet remained strong with $190 billion of regulatory capital and a CET1 ratio nearly 120 basis points above our current minimum requirements.”
“Capital strength allowed us to return more than $2.3 billion to shareholders in dividends and share repurchases, and we announced our plan to increase our quarterly common stock dividend by 9 percent in Q3-23, subject to approval by our Board of Directors.
“These results demonstrate the steadfast value of our responsible growth strategy,” he said.
