Key Points. Here are the numbers: earnings of 85 cents a share vs the 71 cents a share estimate of analysts surveyed by Refinitiv. Shares of the bank climbed 2. In this article.
VIDEO It will be interesting to see what management has to say about those expenses and what a normalized expense run rate truly looks like in the post-COVID world. The other big number investors will be watching is what kind of loan growth Bank of America sees in the third quarter. Not only is the bank the second largest in the U. In mid-September at a financial services conference, the bank shared what commercial-loan growth looked like through July and August. While commercial-loan growth isn't humming by any means yet, it did continue to rise despite the spread of the delta variant, which is good news.
Alastair Borthwick, president of global commercial banking, said at the conference that loan balances in global banking stabilized in the second quarter, and much of the positives management saw in that period spilled over into the first few months of the third.
But Borthwick also said that commercial revolving lines of credit, which businesses can draw on for working capital and capital expenditures and are a big driver of commercial-loan growth across the banking sector, remain "flattish. Another telling sign regarding future loan growth will be how much liquidity Bank of America puts into securities in the third quarter, because banks prefer to invest their liquidity into loans.
Loan growth is particularly important for Bank of America's profitability because it is an incredibly asset-sensitive institution, meaning more of its assets such as loans reprice with interest rates.
If it can grow loans as long-term interest rates climb and the federal funds rate eventually follows , profitability at the bank can soar. Discounted offers are only available to new members. Stock Advisor will renew at the then current list price. Average returns of all recommendations since inception. Cost basis and return based on previous market day close. Trending Topics. Work With Us Careers Affiliate.
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