Bank of America is stuck in a low-profitability trap. Several businesses at the Charlotte, N.C.-based bank actually put in a good showing for the second quarter. The trouble is, BofA as a whole is still struggling to churn out solid earnings – even after aggressive cost-cutting.
The $2-billion (U.S.) earnings figure reported by the bank on Wednesday is, on the face of it, abysmal. It equates to an annualized return on equity of just 3.68 per cent – and was only that high because of a mere 18-per-cent tax rate.