Q4 snap: lower tax rate assists modest beat
BAC delivered a 4% adj. EPS beat assisted by a lower tax rate of ~26%. The impacts of the Tax Act were apparent in every line item and adjusting for those, revenue was just a little lower than consensus. The operating divisions were broadly in line with consensus but Global Markets beat expectations. The efficiency ratio was 62%, 50bp above consensus, but that included an additional $200m for bonuses, equivalent to 90bp. Provisions were also a little higher at $1.0bn but that included a one-off hit of $300m from an international corporate. An effective tax rate of 26% provided a big boost relative to our 35% forecast. In summary, this looks like a good result at the operating level.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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