Bank of America (BAC) got smaller, cut expenses and improved its real estate business, while Morgan Stanley (MS) easily beat expectations with its bond trading business, the banking giants reported Thursday.
BofA earned 31 cents a share in Q1, excluding debt-related charges, up from 17 cents a year ago and better than forecasts of 12 cents. Revenue from interest and noninterest income fell 17% to $22.3 billion, missing views of $22.7 billion.
But the banking giant also closed 51 branches and cut staff by 3,103 during the quarter. The workforce is more than 10,000 lower vs. a year ago. Expenses also dropped 5.6%.
In early afternoon trading, BofA shares were down less than 1%, while Morgan Stanley was up 1.7%. JPMorgan Chase (JPM) Citigroup (C) were little changed, while Wells Fargo (WFC) and Goldman Sachs (GS) lost about 1%.
Like other banks, BofA set aside less money for losses. Its credit-loss provision dropped to $2.42 billion from $3.81 billion.
The amount of debt deemed uncollectible also fell to $4.06 billion from $6.03 billion, and nonperforming loans declined to $27.8 billion from $31.6 billion.
Its real estate unit, which has been a drag on the rest of the bank, more than halved its loss to $1.1 billion. The mortgage portfolio shrank to $1.3 trillion from $1.6 trillion, and the number of delinquent first mortgage loans fell to 1.09 million from 1.3 million.
Like most of its peers, BofA's capital markets businesses showed sharp recoveries from Q4 but were down from a year earlier. But Morgan Stanley's Q1 results increased annually as well as sequentially.
The investment bank earned 71 cents a share, beating views by 26 cents, as revenue climbed 15% to $8.9 billion, well above estimates of $7.3 billion.
Its trading revenue from fixed income, currencies, and commodities was $2.6 billion, up 34% from a year ago and more than double from Q4. The improvement came despite the bank putting up less money at risk in Q1 vs. Q4 and a year earlier.
Source: http://news.investors.com/article/608364/201204191319/bofa-results-improve-morgan-stanley-profit-beats.htm
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