Bank of America CEO Brian Moynihan testifies before the Senate Banking, Housing and Urban Affairs Committee on September 22, 2022 in Washington, DC.
Al Drago | Bloomberg | Getty Images
Bank of America Second-quarter profit and revenue beat expectations on Tuesday, as the company earned more interest income amid rising interest rates.
Here’s what Bank of America reported:
- Earnings: 88 cents per share vs Refinitiv estimate of 84 cents per share
- Revenue: $25.33 billion vs. $25.05 billion expected
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bank explain Earnings rose 19% to $7.41 billion, or 88 cents a share, from $6.25 billion, or 73 cents a share, a year ago. Revenue rose 11 percent to $25.33 billion, largely in line with expectations among analysts polled by FactSet, driven by a 14 percent rise in net interest income to $14.2 billion.
“We continue to see a healthy, but slower pace of growth in the U.S. economy and a resilient job market,” CEO Brian Moynihan said in a release. Organic growth and client activity complemented the favorable impact of higher interest rates.”
Bank of America shares rose more than 4%.
The company’s Wall Street presence helped it beat revenue estimates in the quarter. Fixed-income trading revenue rose 18% to $2.8 billion, beating estimates of $2.77 billion, while equities trading revenue fell 2% to $1.6 billion, beating estimates of $1.48 billion.
Bank of America was expected to be one of the biggest beneficiaries of this year’s rate hikes, but that’s not the case. The company’s net interest income, one of the main drivers of the bank’s income, has been called into question recently due to slowing loan and deposit growth.last week, opponent JPMorgan Net interest income surged, driving a 67% surge in quarterly profit.
Still, CFO Alistair Borthwick told analysts on Tuesday that net interest income would be just over $57 billion this year, reiterating the bank’s previous guidance.
Bank of America shares were down about 11 percent this year through Tuesday, while the KBW Bank Index was down about 20 percent.
This month, the Consumer Financial Protection Bureau said it fined the Charlotte, North Carolina-based bank for abusive customer practices, including fake accounts and bogus fees. Analysts may ask whether the Moynihan problem has been resolved.
Friday, JP Morgan Citigroup and FuGuo bank Both companies reported earnings that topped analysts’ expectations amid rising interest rates. Morgan Stanley Earnings also announced on Tuesday.Goldman Sachs Big banks report earnings on Wednesday.
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