Laying Off Employees, U.K. Clusterf*ck Did Wonders For Bank Of America's Third Quarter Earnings

Yay BofA! Sorry unemployeds/people across the pond.
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Moynihan (Getty Images)

Moynihan (Getty Images)

Remember over the summer, when Britain lost its mind and decided to leave the European Union? Or last spring, when Bank of America consciously uncoupled with a large chunk of employees? Both events weren't so great for the people they were happening to but for BofA with regard to turning a profit? Let's just say they were a rare bright spot in CEO Brian Moynihan's otherwise miserable time at the bank.

Bank of America Corp, the second-largest U.S. bank by assets, reported its first profit increase in three quarters on Monday, foiling expectations for another drop, as bond trading surged and expenses fell. Like rivals JPMorgan and Citigroup, Bank of America enjoyed a boost from a resurgence in trading. That came as clients scrambled to reposition after Britain's surprise June vote to leave the European Union, and changing expectations for monetary policy in the United States, Europe and Japan. Chief Executive Brian Moynihan's cost-cutting campaign also paid off as expenses fell in each of its four major business segments. On a pretax basis, quarterly profit was at its highest in a decade. Net income attributable to shareholders rose 6.6 percent to $4.45 billion in the third quarter ended Sept. 30 from a year ago. Earnings per share rose to 41 cents, from 38 cents in the same period of 2015. Analysts, on average, had estimated a decline to 34 cents a share.

Bank of America profit rises on bond trading, cost cuts [Reuters]

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Bank Of America Hoping To Fire Thousands Of Employees In Record Time

Remember Project New BAC, i.e. Bank of America's plan to transform itself from Ken Lewis's house of fun, where everyone went home happy but the concept of making money was less of a focus than keeping the good times coming, to an institution that did things like post profits? The bank has said previously that PNBAC "will result in $8 billion in annual savings by 2015—$5 billion from the first phase and $3 billion from a second phase" and while it stands by those figures and remains committed to cutting as many employees as it takes, some people would like them to be a bit snappier about it. Bank of America is accelerating a broad cost-cutting plan and has set a target of shedding 16,000 jobs by year's end—cuts that would see the company relinquish its title as U.S. banking's largest employer. The proposed year-end total of 260,000 would be the lowest count since 2008 and likely give Bank of America a smaller workforce than JPMorgan Chase, Citigroup, or Wells Fargo...Chief Executive Brian Moynihan is trying to speed the company's transformation into a smaller and more efficient operation as he tries to persuade investors that expenses can be adjusted to compensate for revenue lost to new regulations, an uneven economy and shaky markets. Since becoming CEO in 2010, he has shifted away from a nationwide expansion strategy embraced by his predecessors Hugh L. McColl Jr. and Kenneth D. Lewis, and shed many of the businesses that he considers to be nonessential...Hitting the new staffing target would fulfill a year early Mr. Moynihan's pledge to slash the bank's workforce by approximately 30,000. "If they want to make any headway toward improving profitability," said Sterne Agee & Leach Inc. senior banking analyst Todd Hagerman, "they need to accelerate the timeline." Bank Of America Ramps Up Job Cuts [WSJ]