BofA Expects 9% Rise in Net Income after Beating Q3 Estimates

Bank of AmericaThe Bank of America’s stocks (NYSE: BAC) were able to recover to $25 levels after experiencing 12 months low figure of $22.74. It is interesting and noteworthy to note that Hathaway Inc. of Warren Buffet became the largest shareholder in August last year.

Bank of America’s Chief Executive Officer Brian Moynihan was extolled by the legendary Buffet the way the former runs the bank. On last Friday, the BofA reported the Q3 results for the fiscal year 2017.

The earnings and revenue for the bank have exceeded the expectations of the analysts. Just like other big banking institutions like JP Morgan and Citigroup, Bank of America has also reported a decline of 22 percent in fixed income revenue. However, based on the overall income, we can easily expect the stocks of the company to rally in the coming times. The stocks were trading at $26.24 on Monday.

One North America based bank The Charlotte has reported revenues worth $22.079 billion for Q3 2017 from figures of $21.863 billion during the same time last year. Analysts were hopeful that Bank of America would report revenues worth $21.976 billion. For the quarter ending in September, the net income was $5.122 billion as compared to $4.452 billion of net income in 2016.

On a share basis, the earnings for quarter 3 2017 of $0.48 were higher as compared to $0.41 during the same quarter last year. Analysts at Wall Street expected earnings worth $0.45 per share for Q3 2017.

Wochit Business

There is a growth of 10% to $8.8 billion in consumer banking revenue. Also, there is an increase in revenue for global wealth and investment management to 6% to $4.6 billion. The revenue for global banking grew by 5% on yearly basis to reach a figure of $5 billion. In this quarter, net interest income was $11.20 billion and registered a growth of 9% or $960 million from last year. It is interesting to note there is an increase in net interest margin from 2.23 percent to 2.36 percent.

For the recent quarter, the net interest income was $10.7 billion which is down by $756 million as compared to last year. The main reason for the decline in non-interest income was due to lower trading revenue and mortgage banking income with higher asset management fees.

As compared to last year figure of $850 million, the provision for credit losses registered $834 million. There is a decline of 3 percent in non-interest income to $13.1 billion with a reduction in personnel and non-personnel expenses. There is an improvement of 60% in efficiency ratio from 62% in 2016.

There is a 6% growth in loan balances to $842 billion and 4% growth in deposits to $1.27 trillion. Bank of America has registered return on average common equity of 8.1 percent. In the past 6 years, this is the highest return on equity by the bank. The bank is able to complete the Q3 fiscal 2017 with a CET1 ratio of 11.9 percent as compared to 11 percent in 2016.

The bank is now progressing and right on track after a lot of catastrophe for nearly 10 years. It is possible due to high-interest rates and cost-cutting. This clearly favours rally in stocks for Bank of America.

Bank of America Stock Price Oct 17th, 2017

Bank of America Stock Price Oct 17th, 2017

The stocks of BofA is above 50 periods moving average and is close to the major technical level of 25. In addition to above, accumulator indicator is also rising. Hence, short-term bullishness reversal in stocks of the bank is expected.

Traders are recommended to purchase “High” or “Above” Option in order to make profits from the rising uptrend in stocks of Bank of America. Strike price around $26 would be best for trading and one should select expiry period around October 25, 2017.

Rich Archer

Rich Archer

Hi, my name is Rich Archer. I am living in London. Welcome to Binary Manual. Reach to Binary Options broker reviews and market news here.


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