Bank of America story updated to focus on cost cuts.
- Bank of America reports second-quarter profit of $4 billion, or 32 cents a share.
- Profit up 63% versus $2.5 billion in the second quarter of 2012.
- Net revenue comes in at $22.9 billion, up 3% from $22.2 billion a year ago.
- The consensus estimate among analysts was EPS of 25 cents a share on revenue of $22.769 billion.
NEW YORK ( TheStreet) -- Bank of America (BAC - Get Report) on Wednesday said net profit for the second quarter rose 63% to $4 billion from $2.5 billion a year ago as it slashed $1 billion in expenses.
Profit in the bank's global markets segment jumped 93% to $959 million from $497 million. Equities revenue in that segment rose 53% from the second quarter of 2012, and was the highest since the first quarter of 2011. The bank cited market shares gains and improved trading performance. Fixed income, currency and commodities sales and trading revenue declined, however, to $2.3 billion as the bank cited "a challenging trading environment toward the end of the quarter as fixed income assets sold off due to market concerns related to the Federal Reserve's policy announcement in June."
Net interest income, meanwhile, climbed 10% to $10.77 billion from $9.78 billion a year ago. The bank cited "favorable market-related impacts of $850 million from lower premium amortization and hedge ineffectiveness, reductions in long-term debt balances, lower rates paid on deposits and higher commercial loan balances, partially offset by lower consumer loan balances as well as lower asset yields."Comparisons to the bank's first quarter, however, were less flattering, drawing criticism from Rafferty Capital Markets analyst Richard Bove, who has a "buy" on Bank of America and all the other global U.S. banks. "The quarter was not inspiring at all. All the profits essentially came from reducing costs and loan loss provisions. It did not come from selling a lot more widgets," Bove said. Earnings per share of 32 cents beat analyst estimates of a 25-cent gain. Revenue rose 3% to $22.9 billion. "We continued to build capital ratios, despite the negative impact of higher interest rates on our bond portfolio, and we reduced expenses related to servicing delinquent mortgage loans at a faster rate than we originally expected," said Chief Financial Officer Bruce Thompson in a press release on Wednesday. -- Written by Dan Freed in New York. Follow @dan_freed