Bank of America (BAC) has reported second-quarter financial results that beat Wall Street forecasts on both the top and bottom lines.
The second largest lender in the U.S. announced earnings per share (EPS) of $0.83 U.S. versus $0.80 U.S. that had been forecast among analysts.
Revenue in the quarter totaled $25.54 billion U.S. compared to $25.22 billion U.S. that had been estimated on Wall Street.
Bank of America attributed the results to growth in its investment banking unit, as well as to a rise in asset management fees.
However, despite beating forecasts, the bank’s profit was down 6.9% from a year earlier, its net interest income declined due to high interest rates, and its revenue rose less than 1%.
Bank of America had previously warned about its net interest income declining, saying that it should bottom in the second quarter and rebound throughout the remainder of 2024 as interest rates move lower.
Net interest income is important to banks as it is the difference between what the bank earns on loans and what it pays depositors for their savings.
Net interest income is one of the primary ways in which banks earn money.
Last week, Wells Fargo’s (WFC) stock fell nearly 10% after it reported a decline in Q2 net interest income.
Bank of America is the latest lender to report that its financial results got a boost from a resumption of deals such as mergers and acquisitions (M&A) and initial public offerings (IPOs).
The biggest banks on Wall Street struggled in recent years with rising interest rates and a dearth of deals due to a 2022 bear market and subsequent recovery.
Bank of America’s stock has risen 43% over the last 12 months to trade at $41.89 U.S. per share.
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