Bank of America Q2 profit beats estimates

Bengaluru

BANK of America Corp (BofA) beat estimates for quarterly profit on Wednesday, as the United States' second-largest lender's loan book benefited from a healthy domestic economy.

Consumer banking has held up for the big Wall Street banks that have reported second-quarter results this week, cushioning a blow from weakness in trading and advisory businesses.

But warning signs also emerged with JPMorgan, Citigroup and Well Fargo reporting a dip in margins, stoking fears that interest rate cuts could further pressure profit by reducing the spread between what banks charge on loans and pay on deposits.

BofA, however, bucked the trend and reported a 3 basis-point increase in its interest margin to 2.44 per cent for the second quarter.

The lender is the most sensitive of the big US banks to interest rate changes because of its large deposit stock and rate-sensitive mortgage securities. Total loans in its consumer banking unit rose 6 per cent, while deposits were up 3 per cent, pushing income from the business up 13 per cent to US$3.3 billion.

Net income applicable to common shareholders rose 10 per cent to US$7.11 billion, or 74 US cents per share, in the second quarter ended June 30. Excluding items, the bank earned 75 US cents per share.

Revenue, net of interest expense, was up about 2 per cent at US$23.08 billion. Analysts had expected a profit of 71 US cents per share and revenue of US$23.2 billion, according to IBES data from Refinitiv. REUTERS