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Bank of America notched up better than expected profits in the second quarter as the US lender expanded its deposit base and loan book and benefited from robust Wall Street trading activity.
The group’s net income rose about 3 per cent to $7.1bn in the second quarter, exceeding analyst expectations of $6.8bn. Revenues rose 4 per cent to $26.5bn, slightly missing forecasts of $26.7bn.
Revenues at the retail bank rose 6 per cent to $10.8bn as the group grew its deposit base and loan book and benefited from higher net interest income, the difference in its cost of funding and rates it charges.
The US lender with a large domestic consumer footprint also increased its provision for credit losses to $1.6bn, from $1.5bn in the same period last year. However, its provisions at the retail bank were flat, highlighting the relative health of US consumers.
“Consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilisation rates rose,” said BofA chief executive Brian Moynihan.
Higher activity in the markets division helped offset lacklustre performance at its investment bank.
Trading revenues jumped 14 per cent to $5.3bn as the bank’s bond and equities desks were boosted by higher volatility linked to geopolitical tensions and US protectionist tariffs.
Fees at the investment bank were, however, down to $1.4bn per from $1.6bn a year earlier.
BofA’s shares rose about 1 per cent in pre-market trading on Wednesday.
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