Bank of America Inc. said on Tuesday its second-quarter profit fell as rising interest rates squeezed expenses, including at its large consumer-banking business.
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By Ken Sweet AP Business Writer
July 16, 2024 8:29am ET
• 2 min read
NEW YORK — Bank of America Inc said its second-quarter profit fell as rising interest rates squeezed the company's expenses, including its large consumer-banking business.
But like Goldman Sachs, Bank of America saw a rebound in activity in its investment banking division, helping to offset some of the weakness in other parts of the bank.
The Charlotte, North Carolina-based bank said on Tuesday it made a profit of $6.9 billion, down from $7.4 billion a year earlier. Earnings per share of 83 cents beat analyst expectations.
Bank of America posted higher loan growth and return on assets in the quarter, but much of the bank's interest income was eaten up by rising interest expenses. Because Bank of America traditionally holds short-term securities on its balance sheet, it has had to lend more quickly and at higher rates than its peers when the Federal Reserve raises interest rates.
The bank had fewer loan losses and delinquencies than its peers and only saw a slight increase in its loan loss reserves.
Bank of America's investment banking division helped offset weaker performance at its consumer bank. The bank saw increased sales and trading revenue from its equity and fixed-income trading desks, as well as higher advisory revenue from its bankers.
The bank's total revenue was $25.4 billion, up slightly from $25.2 billion in the same period last year.
Bank of America shares rose 5.2% to $44.09 in morning trading.