The management’s cost-reduction program will have a favorable impact on profitability, offsetting the pressure from higher interest rates
Bank of America being a leading mortgage lender, the post-earnings discussion of its top executives is likely to touch upon the challenges facing the housing market and the revised monetary policy of the Federal Reserve, which is currently preparing for this year’s fourth rate hike in December.
Usually, back-to-back rate hikes leave banks in a tricky situation, wherein the initial befits from higher rates tend to reverse in the long term, owing to diminishing demand for loans and the increase in the interest payable to deposit holders.
Citigroup posts mixed results in Q3, shares up 2%
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In the second quarter, the Charlotte, North Carolina-based financial services provider reported a 43% growth in earnings to $0.63 per share, despite a modest drop in revenues.
Kicking off this season’s financial earnings, JPMorgan Chase (JPM) Friday posted a 5.2% growth in third-quarter revenues, which pushed up earnings by 33% to $2.34 per share. Earnings of Citigroup [C] climbed 21% to $1.73 per share in the most recent quarter, helped mainly by lower corporate taxes.
Bank of America shares lost about 8% since the beginning of the year. After opening Friday’s regular session slightly higher, the stock traded lower throughout the day. The current spell of decline that started in mid-September is expected to continue in the coming weeks.
Bank of America posts EPS of 63 cents in Q2
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