Q2 snap: good trading revenue, lower costs
BAC delivered an 11% EPS beat driven by higher trading revenues, lower provisions, good cost control and a low effective tax rate. There was also a $572m gain on sale, which accounted for over half of the beat. Global Markets trading numbers drove the revenue beat with FICC 2% above consensus and Equities trading 6% above. Costs were well controlled (1% below consensus), provisions were lower (15% below consensus) and the effective tax rate of 20% was also 2pp below our forecast. The efficiency ratio of 58.8% was down 240bp YoY. On the negative side, the NIM was down 1bp QoQ but adjusting for trading assets NIM was up 7bp. Overall, it was a number of incremental wins that drove the beat and a respectable ROTE of 14.0%.Bank of America is a bank and a financial holding company. Through its subsidiaries, the company provides a range of banking, investing, asset management and other financial and risk management products and services. The company's segments include: Consumer Banking, which provides credit, banking and investment products and services; Global Wealth & Investment Management, which provides investment management, brokerage, banking and retirement products; Global Banking, which provides lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services; and Global Markets, which provides sales and trading services and research services.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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