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Bank of America Seen Benefiting From Diversified Business Model, RBC Says

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Bank of America (BAC) has a diversified business model and a low-cost deposit base that support stronger long-term earnings growth, RBC Capital Markets said in a note emailed Wednesday.

The firm said Q2 results reflected positive operating leverage and organic growth, with revenue increasing 15% year over year while expenses rose a modest 8%, resulting in a 6.6% operating leverage.

RBC said higher net interest income, stronger investment banking fees and higher asset management fees supported the quarter.

The firm also noted improving credit quality, including a lower net charge-off ratio, lower commercial criticized exposure and a fifth consecutive quarterly improvement in credit card delinquencies.

RBC maintained its outperform rating on Bank of America and raised its price target to $65 from $59.

Price: $61.78, Change: $+1.16, Percent Change: +1.91%

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