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Bank of America’s Earnings: Slight Decline in 3Q15?

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Oct. 13 2015, Updated 3:08 p.m. ET

Earnings take a hit on lower trading volumes

Bank of America Corporation (BAC) plans to declare its 3Q15 earnings on October 14, 2015, before markets open. Bank of America’s results will come one day after its peer JP Morgan Chase (JPM) reports its earnings. Wall Street investors (SPY) are eagerly watching out for US banks’ earnings to understand the impact that low interest rates have had.

With the Fed deciding to keep the federal funds rate at near-zero levels for an extended period of time, US banks have been earning lower returns on their assets and lower interest-based income. However, Bank of America’s management has hinted at a rise in net interest income despite the prevalent low-interest rates. The company also mentioned that it expects its 3Q15 revenues from the trading division to decline by approximately 5%, as trading volumes in the fixed-income currencies and commodities markets have fallen.

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3Q15 estimates

According to consensus data, net revenues for Bank of America are expected to be $20.9 billion, slightly lower than the $21.4 billion revenues reported in 3Q14. In 2Q15, the company reported revenues of $22.1 billion. Its net income is expected to be $3.8 billion for the quarter, compared to the $5.3 billion reported in 2Q15.

The bank’s EPS (earnings per share) is expected to be $0.35 for the quarter, compared to the $0.45 reported in 2Q15 and losses of $0.04 reported in 3Q14.

While Wells Fargo & Company (WFC) will report its earnings later in the day on October 14, peers like Citigroup (C) and Goldman Sachs Group (GS) will report in susequent days.

In the next part of this series, we’ll take a look at Bank of America’s return ratios.

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