By Bank of America on Tuesday said second-quarter revenue and profit topped expectations on rising investment banking and asset management fees.
Here’s what the company reported:
The bank said profit slipped 6.9% from the year earlier period to $6.9 billion, or 83 cents a share, as the company’s net interest income declined amid higher interest rates. Revenue climbed less than 1% to $25.54 billion.
The firm was helped by a 29% increase in investment banking fees to $1.56 billion, edging out the $1.51 billion StreetAccount estimate. Asset management fees rose 14% to $3.37 billion, buoyed by higher stock market values, helping the firm’s wealth management division post a 6.3% increase in revenue to $5.57 billion, essentially matching the estimate.
Net interest income slipped 3% to $13.86 billion, also matching the StreetAccount estimate.
But new guidance on the measure, known as NII, gave investors confidence that a turnaround is in the making. NII is one of the main ways that banks earn money.
The measure, which is the difference between what a bank earns on loans and what it pays depositors for their savings, will rise to about $14.5 billion in the fourth quarter of this year, Bank of America said in a slide presentation.
That confirms what executives previously told investors, which is that net interest income would probably bottom in the second quarter.
Wells Fargo shares fell on Friday when it posted disappointing NII figures, showing how much investors are fixated on the metric.
Shares of Bank of America climbed 5.4%, aided by the NII guidance.
Last week, JPMorgan Chase, Wells Fargo and Citigroup each topped expectations for revenue and profit, a streak continued by Goldman Sachs on Monday, helped by a rebound in Wall Street activity.
