Bank of America registers drop in Global Markets revenues in Q2 2021
Bank of America Corp (NYSE:BAC) today reported its financial performance metrics for the second quarter of 2021, with the Global Markets segment showing a drop in revenues and income.
Global Markets net income decreased $987 million from the year-ago quarter to $908 million. The result was also markedly weaker than in the preceding quarter. Excluding net DVA, net income decreased 55% to $934 million.
The segment generated revenue of $4.7 billion in the second quarter of 2021, down 12% from a year earlier. The decline reflected lower sales and trading results from a strong year-ago period. Excluding net DVA, revenue decreased 15%.
Noninterest expense increased $787 million, or 29%, to $3.5 billion, driven by higher costs associated with processing state unemployment benefit claims and activity-related expenses in sales and trading.
FICC revenue decreased 38% to $2.0 billion, as the prior year benefited from a robust trading environment for macro products and strengthening markets for credit products after their pandemic related sell-off, whereas markets in Q2-21 were more benign and weak for agency mortgages.
Equities revenue increased 33% to $1.6 billion, thanks to a stronger trading performance and increased client activity in derivatives and Asia.
Across all segments, net income amounted to $9.2 billion, or $1.03 per diluted share, in the second quarter of 2021. The figure reflects:
- $1.6 billion provision for credit losses benefit;
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$2.0 billion positive tax adjustment related to revaluation of UK deferred tax assets.
Revenue, net of interest expense, decreased 4% from a year earlier to $21.5 billion. Net interest income (NII) declined 6% to $10.2 billion, due primarily to lower interest rates.
Provision for credit losses decreased $6.7 billion to a benefit of $1.6 billion, reflecting a reserve release of $2.2 billion amid an improved macroeconomic outlook.