Bank of America makes little hay as sun shines

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A Bank of America is pictured in the Manhattan borough of New York City, January 30, 2019. REUTERS/Carlo Allegri

NEW YORK, July 14 (Reuters Breakingviews) - Playing it safe was never less rewarding. Bank of America (BAC.N) reported $9.2 billion of earnings for the second quarter, beating estimates from Refinitiv by $2.5 billion. That had much to do with a windfall from reversing bad-debt provisions and a tax adjustment, totaling $3.6 billion. It had woefully little to do with the boom in deals and capital raising that boosted the U.S. lender’s rivals read more .

Brian Moynihan’s bank had its third-best quarter ever for investment banking yet its advisory fees were unchanged from a year ago. Goldman Sachs (GS.N) and JPMorgan (JPM.N) the previous day reported 83% and 52% gains, respectively. Bank of America’s total investment banking revenue of $2.1 billion was just two-thirds of theirs; its $3.6 billion of trading revenue was around half of JPMorgan’s.

That’s partly by design: Bank of America takes less risk read more – which meant its trading revenue fell less, year-on-year, than at JPMorgan, Citigroup (C.N) and Goldman Sachs. Moynihan has also recently reshuffled some dealmakers, putting Americas merger heads Kevin Brunner and Ivan Farman in global roles. With their bank just fifth in the Refinitiv global rankings for mergers and acquisitions, they start with modest expectations. (By John Foley)

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Editing by Swaha Pattanaik and Amanda Gomez

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