Bank of America Beats Expectations Despite Q2 Profit Decline

Bank of America reported a decline in second-quarter profit due to higher deposit costs and lower interest income. However, the bank outperformed analysts' expectations thanks to strengths in investment banking and trading. Shares rose 2.4% as BofA forecast better-than-expected net interest income for the fourth quarter.

Bank of America reported a decline in second-quarter profit as rising deposit costs led to lower interest income, yet it exceeded analysts' expectations due to strong performance in investment banking and trading sectors. Shares of the bank increased by 2.4% in premarket trading following the positive forecast for fourth-quarter net interest income (NII).

In a statement, CEO Brian Moynihan highlighted the complementary strengths of BofA's consumer banking and global markets segments. The investment banking division saw significant gains from underwriting fees, reflecting a resurgence in capital markets driven by a resilient U.S. economy. Merger and acquisition activities also boosted advisory fees.

The second-largest U.S. lender earned $6.9 billion, or 83 cents per share, for Q2, surpassing expectations. Despite higher costs to prevent deposit outflows, BofA anticipates a recovery in the second half, forecasting NII of $14.5 billion in Q4. Shares have risen 24.4% this year, outpacing competitors JPMorgan and Wells Fargo.

(With inputs from agencies.)