Bank of America reported its financial results for the second quarter today, which included a 12% gain in net income, which was $4.30 billion compared to $3.85 billion the previous year.
The company’s earnings per share went up 14% reaching $1.06 per share (diluted) from $0.93. Return on average common shareholders’ equity in the second quarter was 17.54%.
Second quarter earnings included merger and restructuring charges, which reduced earnings per share by 2 cents. MBNA, credit-card company that Bank of America is acquiring for $35 billion reported a decrease in second-quarter profit.
“As we successfully complete the Fleet integration, and look ahead to the MBNA acquisition, we will build upon a successful customer-centric formula to provide continued long-term growth for investors from our expanded and enhanced financial services platform,” Lewis said. “I am very proud that we are continuing to achieve customer growth while completing our integration of Fleet.” According to a press release, issued by Bank of America,
Improved results were driven by a 7 percent increase in revenue and 3 percent decrease in noninterest expense. The revenue increase was primarily due to strong noninterest income growth, led by the growth in card income and service charges. Also contributing were gains from whole loan sales and equity investment gains. Noninterest expense fell due to savings created by the merger with FleetBoston Financial Corporation.
Nearly all major customer-related actions related to the Fleet integration have now been accomplished as several major systems conversions were completed during the quarter. Direct cost savings achieved in the second quarter totaled $441 million. Total savings from the Fleet merger are projected to be $1.85 billion for 2005.
The company earned $8.99 billion, or $2.20 per share (diluted) for the first six months of the year compared to 6.53 billion, or $1.85 per share, last year.
Aside from its plan to acquire MBNA, Bank of America also agreed during the second quarter to buy about 9% of China Construction Bank for $3 billion, with an option to increase its stake in the future. The MBNA acquisition is expected to reach completion in the fourth quarter.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
