Bank of America Corp. (BAC), the lender most hobbled by the collapse of the U.S. housing market, said second-quarter profit more than doubled as the mortgage business rebounded and expenses fell to the lowest since 2008.
Analysts have fretted that Bank of America’s focus on cutting expenses meant revenue would be permanently lost. Chief Financial Officer Bruce Thompson said Wednesday that the firm could push revenue higher while containing expenses. Revenue of $22.3 billion in the second quarter beat all 22 estimates in a Bloomberg survey of analysts.
Bank of America’s costs shrank 25 percent to $13.8 billion, lower than the $14.9 billion estimate from Wells Fargo & Co.’s Matthew Burnell, as legal expenses plunged to $175 million from $4 billion a year earlier. Even excluding litigation costs, expenses fell 6 percent.
Net income increased to $5.32 billion, or 45 cents a share, from $2.29 billion, or 19 cents, a year earlier, the Charlotte, North Carolina-based lender said in a statement. That beat the 36-cent average estimate of analysts surveyed by Bloomberg.
The firm’s mortgage operation outperformed its biggest rivals in the second quarter, as revenue from the business almost doubled to $1 billion from a year earlier. Home-loan revenue at Wells Fargo & Co., the largest U.S. mortgage lender, dropped 1 percent to $1.71 billion, the San Francisco-based company reported Tuesday. It fell 21 percent to $1.8 billion at JPMorgan Chase & Co.
Thompson said efforts are paying off to get bankers across divisions to push more products, including mortgages, to customers.