by Christopher Freeburn | July 18, 2012 10:33 am
Bank of America (NYSE:BAC) reversed last year’s record second-quarter loss by announcing a quarterly profit of $2.5 billion today.
The bank posted second-quarter revenue of $21.97 billion, up sharply from $13.24 billion in 2011. It also reduced its provision for bad loans to $1.77 billion, down from $3.26 billion last year, Reuters noted.
Investors were not impressed, sending Bank of America shares sliding more than 2% in Wednesday morning trading.
The turnaround was aided by a cost-cutting program that slashed expenses by 35% compared to last year. The bank said it plans to slash another $3 billion in expenses over the next few years.
Part of that cost-cutting came in the form of 12,000 fewer workers.
The bank plans to shed a total of 30,000 workers by the close of 2014 in an ongoing effort to cut expenses by $5 billion annually.
Bank of America has struggled to recover from losses resulting from its 2008 acquisition of mortgage company Countrywide Financial. Income from its mortgage unit during the second quarter was $1.66 billion, compared to a $13.2 billion loss last year when the bank had to increase its reserves against delinquent mortgages.
In the past week, JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) have reported earnings that exceeded or met Wall Street’s expectations.
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