Bank Of America Corp Net Income jumped on 54.4%
16 Jan 2019 • About Bank Of America Corp (
$BAC) • By InTwits
Bank Of America Corp reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bank Of America Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.4% while average EBITDA Margin was 0.0% for the sames years. In 2018 SBC/Revenue was even higher: 1.6%
- In the last 5 years the company invested considerably less than D&A: $1,160m vs. $2,063m. In 2018 this situation was still the same: CAPEX was while D&A was 2,063
- The company has potentially unprofitable business model: ROIC is 4.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.4x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 10.3%. Revenue decline was slowing down on average by 4.2 pp per annum in the last 5 years.
Net Income margin increased on 7.3 pp from 18.2% to 25.5% in 2018. Net Income margin stuck to a growing trend at 4.2 pp per annum in the last 5 years. The efficient tax rate was 18.6% in 2018.
Return on investment
The company operates at low ROIC (4.5%) and ROE (10.9%). ROIC increased slightly on 0.60 pp from 3.9% to 4.5% in 2018. ROE increased on 4.1 pp from 6.8% to 10.9% in 2018. ROIC followed a growing trend at 0.81 pp per annum in the last 5 years. ROE grew at 1.9 pp per annum in 2014-2018.
Leverage (Debt)
Debt decreased on 2.6% while cash surged on 12.7%.
Bank Of America Corp has short term refinancing risk: cash is only 64.4% of short term debt.
The company paid 24.5% of Net Income as dividends in 2018.
Management team
CEO total compensation was
$22,754,510 in 2018 which included
$1,500,000 salary.
At the end of financial year the company had 0.11% shares owned by insiders.
At the end of financial year the company had 204,000 employees. Average revenue per employee in 2018 was
$542,078.
Financial and operational results
FY ended 31 Dec 2018
Bank Of America Corp ($BAC) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 95,181 | 93,514 | 93,662 | 100,264 | 110,584 | 10.3% |
| Tax | | | | | 6,437 | |
| Net Income | 4,833 | 15,836 | 17,822 | 18,232 | 28,147 | 54.4% |
| Stock Based Compensation | | | | | 1,729 | |
Balance Sheet
|
|---|
| Cash | 138,589 | 159,353 | 147,738 | 157,434 | 177,404 | 12.7% |
| Short Term Debt | 337,365 | 269,352 | 257,266 | 290,718 | 275,397 | -5.3% |
| Long Term Debt | 212,415 | 236,764 | 216,823 | 227,402 | 229,340 | 0.9% |
Cash flow
|
|---|
| Capex | 1,160 | 0 | 0 | 0 | | |
| Dividends | | | | | 6,895 | |
Ratios
|
|---|
| Revenue growth | -6.4% | -1.8% | 0.2% | 7.0% | 10.3% | |
|
|---|
| SBC, % of revenue | | | | | 1.6% |
| Net Income Margin | 5.1% | 16.9% | 19.0% | 18.2% | 25.5% | 7.3% |
| CAPEX, % of revenue | 1.2% | 0.0% | 0.0% | 0.0% | | |
|
|---|
| ROIC | 0.9% | 2.9% | 3.4% | 3.9% | 4.5% | 0.6% |
| ROE | 1.7% | 6.3% | 6.8% | 6.8% | 10.9% | 4.1% |
People
|
|---|
| Insider ownership | | | | | 0.1% | |
| Employees | | | | | 204,000 | |
| Revenue/Employee, th. $ | | | | | 542 | |
Peers in Banks
Below we provide Bank Of America Corp benchmarking against other companies in Banks industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| European Islamic Investment Bank ($EIIB) | 42.3% | -4.1% | -63.9% | 232.5% | |
| Halyk Savings Bank Of Kazakhstn JSC ($HSBK) | 16.3% | 19.5% | 16.4% | 59.5% | |
| Zenith Bank ($ZENB) | | 6.8% | 17.9% | 46.7% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 18.9% | 26.8% | 27.0% | 46.4% | |
| TCS Group Holding ($TCS) | 11.5% | 10.6% | 34.0% | 33.7% | |
| |
|---|
| Median (43 companies) | 15.7% | 4.0% | 3.9% | 4.5% | 13.6% |
|---|
| Bank Of America Corp ($BAC) | | -1.8% | 0.2% | 7.0% | 10.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lloyds Banking Group ($LLPC) | 13.1% | 13.6% | 14.5% | 14.5% | |
| Banco Santander Sa ($BNC) | 8.9% | 10.2% | 9.1% | 10.0% | |
| Bcb Hldgs Ltd ($BCBW) | 5.4% | 2.5% | 3.0% | 7.3% | 5.9% |
| Royal Bank Of Scotland Group ($RBS) | 4.1% | 4.6% | 5.6% | 7.1% | |
| Diamond Bank ($DBPA) | 6.0% | 6.7% | 6.2% | 7.0% | |
| |
|---|
| Median (39 companies) | 2.1% | 2.6% | 2.5% | 1.9% | 1.0% |
|---|
| Bank Of America Corp ($BAC) | 1.2% | 0.0% | 0.0% | 0.0% | |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TCS Group Holding ($TCS) | 6.7% | 3.4% | 22.5% | 31.8% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 30.1% | 30.3% | 28.0% | 25.3% | |
| Guaranty Trust Bank ($GRTB) | 17.8% | 16.0% | 17.4% | 18.3% | |
| Sberbank Of Russia ($SBER) | 4.8% | 4.0% | 9.4% | 13.0% | |
| Zenith Bank ($ZENB) | 15.0% | 11.2% | 11.1% | 11.4% | |
| |
|---|
| Median (43 companies) | 4.4% | 3.5% | 4.6% | 4.6% | 4.6% |
|---|
| Bank Of America Corp ($BAC) | 0.9% | 2.9% | 3.4% | 3.9% | 4.5% |
