Bank of America tops estimates on reserve release, strong advisory and asset management results

Earnings

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Bank Of America CEO Brian Moynihan is interviewed by Jack Otter during “Barron’s Roundtable” at Fox Business Network Studios on January 09, 2020 in New York City.
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Bank of America is scheduled to report third-quarter earnings before the opening bell Thursday.

Here’s what Wall Street expects:

  • Earnings: 71 cents a share, 39% higher than a year earlier, according to Refinitiv.
  • Revenue: $21.8 billion, 6.5% higher than a year earlier.
  • Net Interest Income: $10.6 billion on a reported basis, according to StreetAccount
  • Trading Revenue: Fixed Income $1.93 billion, Equities $1.45 billion
  • Investment Banking Revenue: $2 billion

Has loan demand at Bank of America turned the corner?

That’s what analysts are wondering about the second-biggest U.S. lender by assets. Investors want to see loan growth improve from a weak first half of the year because that will help the bank produce more interest income.

Like other lenders, Bank of America set aside billions of dollars for credit losses last year, when the industry anticipated a wave of defaults tied to the coronavirus pandemic. Banks have been releasing some of those funds when the losses didn’t arrive, and analysts will be curious how much of a boost that dynamic will have in the second half of the year.

They will also likely ask CEO Brian Moynihan about succession planning after his most senior deputy, chief operating officer Tom Montag, announced his departure. Last month, Moynihan announced a sweeping management overhaul, including a new finance chief, technology head, general counsel and chief administrative officer.

Shares of Bank of America have climbed 42% this year, exceeding the 36% gain of the KBW Bank Index.

On Wednesday, bigger rival JPMorgan Chase posted results that beat expectations, driven by a $1.5 billion boost from better-than-expected loan losses.

This story is developing. Please check back for updates.

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