Bank of America (BofA) reported a 32% YoY drop in Q2 2022 net income to $6.2bn and net revenues of $22.7bn, up 6% YoY. Provisions for credit losses were at $523mn, increasing $2.1bn over the last year. Besides, it reported $425mn in expenses towards regulatory matters, impacting profits. Excluding regulatory expenses, the bank earned $0.78/share, beating estimates of $0.75/share. Its revenues were also in-line with estimates of $22.7bn. Net interest income increased 22% to $12.4bn, driven by higher interest rates, lower premium amortization, and strong loan growth. Its major Consumer Banking business’ net income decreased by 5% YoY to $2.9bn, due to increased provision expense of $350mn. Global Wealth and Investment Management’s net income rose 16% YoY to $1.2bn. Global Banking saw net income fall 38% to $1.5bn driven by provision expense of $157mn while Global Markets’ net income rose 12% YoY to $1bn. BofA returned a total of $2.7bn to shareholders through share repurchases and common stock dividends during the quarter. Its CET1 ratio was down 100bp YoY to 10.5%.
BofA’s 6.25% Perp was up 0.11 at 99.06 cents on the dollar, yielding 6.73%.
Goldman Sachs (GS) reported Q2 2022 net income of $2.8bn or $7.73/share, down 49% YoY. Net revenues were at $11.8bn down 23% YoY. However, the results saw a beat of analyst forecasts of $6.58/share and $10.8bn of net revenues. The bank reported provision for credit losses at $667mn compared with a net benefit of $92mn in Q2 2021. Investment Banking posted quarterly net revenues of $2.1bn, down 41% YoY due to a stronger previous year and base effects. Also, industry-wide completed M&A transactions fell, alongside equity/debt underwriting also seeing a significant decline leading to lower revenues. Global Markets net revenues were up 32% YoY to $6.5bn as FICC (Fixed Income, Currencies and Commodities) generated a 55% pickup and Equities saw a 11% rise thanks to solid client activity and increased volatility amid an evolving macroeconomic backdrop. Asset management revenue fell 79% to $1bn due to macroeconomic concerns and the prolonged war in Ukraine with $221mn in equity investment losses. Consumer & Wealth Management revenues went up 25% YoY to $2.2bn driven by higher placement fees, significantly higher credit card balances, and higher deposit balances. During the quarter, the firm repurchased $500mn in stock and paid $719mn in dividends. Its CET1 ratio was down 20bp YoY to 14.2%.
Goldman’s 4.95% Perp was up 0.96 at 92.5 cents on the dollar, yielding 8.27%.