Bank of America (BAC) reported second-quarter earnings of $6.8 billion, or $0.63 per share in Q2, topping market consensus as it managed to cut more expenses than expected. Meanwhile, the topline slid 1% and came in slightly above market expectations during the quarter at $22.6 billion. Analysts had, on an average, expected $22.3 billion. BAC shares rose about 1% in premarket trading today.
Helped by higher interest rates and strong growth in loans, net interest rate grew 6% to $11.7 billion. On the other hand, non-interest income decreased 7% to $11 billion during the second quarter.
CEO Brian Moynihan said in a statement, “We grew consumer and commercial loans; we grew deposits; we grew assets within our Merrill Edge business; we generated more net new households in Merrill Lynch; and we supported more institutional client activity — all of this while we continued to invest in our businesses and began an additional $500 million technology investment, which we intend to spend over the next several quarters, due to the benefits we received from tax reform.”
Revenue from its largest segment, Consumer Banking, rose 8% to $9.2 billion, as deposits improved 5% to $688 billion.
Shares of the second-largest US bank were hurt this year by the ongoing trade war between the US and China as investors remained concerned over its risk assets. Since the beginning of March, the bank’s shares have slipped over 11%, versus 3.1% improvement witnessed by S&P 500 index.
Earlier last week, rivals JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) had reported earnings. All the three banks saw their stock decline after their results failed to meet the expectations of shareholders.
Related IG: First quarter earnings AlphaGraphic (Click to enlarge)