Bank of America reports 'strong quarter' driven by noninterest income

That marked a decrease from the prior year’s second-quarter net income of $7.4bn and earnings per share of 88 cents.

Revenue for the quarter increased by 1% year-on-year, reaching $25.4bn, driven by noninterest income, which rose 6% to $11.7bn.

“Our team produced another strong quarter, serving a growing client base,” said chair and chief executive officer Brian Moynihan.

“The strength and earnings power of our leading consumer banking business is complemented by the growth and profitability of our global markets, global banking, and wealth management businesses.”

The bank's net interest income fell 3% to $13.7bn due to higher deposit costs, which outweighed higher asset yields and modest loan growth.

Provision for credit losses increased to $1.5bn from $1.1bn in the same period last year, while net charge-offs remained stable at $1.5bn compared to the prior quarter, but were significantly higher than the $869m recorded in the second quarter of 2023.

Noninterest expenses rose 2% to $16.3bn, primarily due to investments in personnel and revenue-related compensation.

Average deposit balances grew 2% to $1.91trn, and average loans and leases saw a modest increase to $1.05trn.

The bank’s common equity tier 1 (CET1) capital ratio stood at 11.9%, comfortably above the new regulatory minimum of 10.67% set to take effect in October.

Bank of America also returned $5.4bn to shareholders through dividends and share repurchases.

In the consumer banking segment, net income was $2.6bn on revenue of $10.2bn, reflecting a 3% decline.

Despite that, the segment added 278,000 net new consumer checking accounts, marking its 22nd consecutive quarter of growth.

Combined credit and debit card spending increased by 3% to $234bn.

The global wealth and investment management division reported a net income of $1bn, with client balances exceeding $4trn, a 10% increase driven by higher market valuations and positive net client flows.

Global banking achieved a net income of $2.1bn, bolstered by a 29% increase in investment banking fees to $1.6bn.

The global markets segment also performed well, with net income of $1.4bn and a 9% rise in sales and trading revenue to $4.7bn.

Moynihan highlighted the continued success of the global markets business, noting, “Our Global Markets business delivered its ninth consecutive quarter of year-over-year revenue growth in sales and trading, earning double-digit returns.

“Our investments in this business are delivering for our shareholders.”

At 0700 EDT, shares in Bank of America Corporation were up 1.96% in premarket trading in New York, at $42.71.

Reporting by Josh White for Sharecast.com.