BAC in the gang

13 October 2017 By John Foley Follow @johnsfoley

Decent loan growth and a strong handle on costs allowed the bank run by Brian Moynihan to crank out its best earnings in years. BofA now seems likely to earn its cost of capital sooner than Citi. That justifies not only trading at book value, but its premium to its rival, too.

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Bank of America on Oct. 13 reported third-quarter net income available to common shareholders of $5.1 billion. At $0.48 a share, earnings beat the consensus estimate of Wall Street analysts of $0.46.

The U.S. lender’s revenue of $21.8 billion slightly undershot the consensus estimate of $22 billion. Its annualized return on common equity was 8.1 percent for the quarter and 7.8 percent for the first nine months of the year.

Total loans were $927 billion at the end of September, up 2.4 percent on a year earlier. Trading revenue, roughly 14 percent of the group’s total top line, fell 13 percent compared with the same period in 2016.

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