Morgan Stanley targets $1B in cost savings

Category: Business Loans Published: Tuesday, 26 January 2016 Written by Super User

In addition to a slowdown in trading, the banking industry is also facing deteriorating energy investments, which could squeeze earnings in 2016.

Bank of America, which also posted results Tuesday, said it took a $500 million reserve on souring energy loans in the fourth-quarter. Loans in other areas remained strong, however, including an uptick in small business loans, executives said in a conference call.

BofAs fourth-quarter results beat Wall Streets profit expectations, but fell short on revenue.

Big banks generally are adding to their cushions against bad energy loans as oil prices fall to 12-year low at around $30 a barrel. Such cushions increase costs, which crimp profits.

BofA said it earned 28 cents a share in the three months ended in December on revenue of $19.5 billion, up from profits of 25 cents a share on revenue of $18.9 billion last year. Analysts had expected Bank of America to earn 27 a share on revenue of $19.9 billion, according to data from Samp;P Capital IQ.

Follow USA TODAY reporter Kaja Whitehouse on Twitter: @kajawhitehouse

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