Bank of America: The limits of fasting

UK Only Article: 
standard article

Issue: 

Can she fix it?

Fly Title: 

Bank of America

Location: 

New York

Main image: 

20160423_FNP001_3.jpg

Rubric: 

Severe cost-cutting is getting a giant of American banking only so far

INVESTORS in American banks are a hardened lot. Profits at the six biggest were down in the first quarter, year on year—by as much as 53% in the case of Morgan Stanley—thanks chiefly to dwindling earnings in their investment-banking units. Earlier this month regulators rejected the “living wills”—blueprints for breaking up or liquidating a bank should it get into trouble—of all six save Citigroup. Yet markets barely flinched. Limp profits and brickbats from regulators, alas, have become routine.
Yet even these grizzled veterans have their doubts about Bank of America. Its profits fell by 13% in the first quarter—much better than some. But that left its return on equity at a measly 4%, the lowest figure among the …

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