Big banks earnings falter

Two of the larger US banks reported first quarter earnings. The results were more inline with analysts outlook for large banks.

Bank of America and Wells Fargo both missed on the profit side due to lacklust growth overall in the US economy.

BofA said its first-quarter profit fell, hurt by a big drop in trading revenue and the drag of low interest rates.

The Charlotte, N.C.-based bank reported a profit of $2.68 billion, or 21 cents a share. That compares with $3.1 billion, or 25 cents a share, in the same period last year. Analysts expectations were for earnings of 20 cents a share.

Revenue fell to $19.7 billion. Shares of BofA are down 17 percent so far this year.

Bank of America Chairman and CEO Brian Moynihan, CEO is hoping that this year will represent a new chapter for the bank, which has been dogged by legal fees and problems with the Federal Reserve’s annual test of banks’ financial health, known as the stress test.

Wells Fargo & Co. said its first-quarter profit fell 5.9 percent as the nation’s third-largest bank by assets continued to deal with a slump in oil prices.

The San Francisco-based bank reported a profit of $5.46 billion, or 99 cents a share. That compares with $5.8 billion, or $1.04 a share, in the same period of 2015. The latest results included a tax benefit of 7 cents a share.

Analysts expectations were for earnings of 97 cents a share.

Revenue rose 4.3 percent to $22.2 billion. Analysts had expected $21.61 billion.

Wells Fargo shares have fallen 9.8 percent since the start of 2016, in line with the decline in the KBW Nasdaq Bank index of large commercial lenders over the same period.

Low oil prices have punished many energy companies and pushed them into distress, developments that affect Wells Fargo more than other large banks since it is one of the most sizable lenders to the industry.