Bank of America facing breakup calls after results fall short

Bank of America boss Brian Moynihan is fielding more calls about breaking up the bank after its latest results lagged rivals.

While lower legal bills this year boosted the bottom line, the bank failed to benefit from a trading rebound that has lifted revenue at rivals. BofA posted lower-than-expected net income of $2.98 billion, or 27 cents a share, compared with a loss of $514 million, or 5 cents, a year ago. Revenue fell 5.9 percent to $21.4 billion.

During a call Wednesday to discuss results, two analysts asked Moynihan about a shareholder proposal that would split the bank. BofA tried to prevent the proposal from being put to a vote at its upcoming May 6 annual meeting, but regulators shot it down.

“The proxy says your board believes the proposal would not enhance stockholder value,” said CLSA analyst Mike Mayo. “If that’s the conclusion of the board, why not share some of the insights of the board to investors?”

Moynihan said the bank has “done a lot of simplification” by shrinking assets to $2.1 trillion, from $4 trillion. “The question would be: What would we look like after?” he said. “We’d have capital we can’t deploy and we’d have less earnings power.”

Glenn Schorr, another analyst, asked why “the board is so against shareholders voting” and what the bank would have to do if the proposal passed.

Moynihan said it was a “core board duty” to determine the best way to return value to shareholders.