By Dhirendra Tripathi
Investing.com – Bank of America Corp (NYSE:) stock was down more than 2% in Wednesday’s premarket trading as its second-quarter revenue fell and came in below expectations.
Revenue dropped 4% to $21.5 billion for the three months ended June 30 as trading income in global markets fell and lending margins were squeezed by rock-bottom interest rates. Net interest income fell 6%.
Analysts had expected the revenue around $21.87 billion.
Higher expenses on account of bigger pays and benefits, contribution to ESG initiatives and processing transactional card claims related to state unemployment benefits also weighed on the performance of the bank.
The bottom line was boosted by the release of provisions against credit losses that the bank had booked earlier in the pandemic. The bank released reserves of $2.2 billion.
A positive $2 billion tax adjustment related to revaluation of U.K. deferred tax assets also boosted profits that came at $9.2 billion or $1.03 diluted earnings per share.
The bank returned nearly $6 billion in the June quarter through common dividends and share repurchases and chief financial officer Paul Donofrio said it expects to return a higher amount in the coming quarters. Those intentions have already been flagged by the bank.