Bank of America
Bank of America said its quarterly profit rose 19 percent, the latest of large banks to see profits soar as interest rates rose.
The country’s second-largest bank by assets posted a profit of $7.4 billion in the three months ended June 30, up from $6.2 billion in the same period a year earlier.
On a share basis, Bank of America gained 88 cents, compared to 73 cents a year ago. Analysts were expecting a profit of 84 cents per share, according to a survey by FactSet Analytics.
Like its main competitors, Bank of America benefited from wealthy clients, businesses and customers who moved deposits to the bank in search of safety after other banks went bankrupt this spring.
The country’s largest banks are seen as enjoying tacit government support, given their “too big to fail” status among the country’s financial institutions.
The Federal Reserve raised the benchmark interest rate to between 5 percent and 5.25 percent starting in March 2022.
Revenue rose 11 percent to $25.33 billion, beating expectations of $25.05 billion, driven by a 14 percent jump in net interest income to $14.2 billion, essentially matching the expectations of analysts polled by Factset.
The bank set aside approximately $602 million to cover potential bad loans in the quarter.
Many banks have increased so-called loan loss reserves over the past few quarters as customers have begun borrowing again after stepping away from doing so during the pandemic.
Bank of America shares rose by more than 4 percent at the close of Tuesday’s trading on Wall Street, and continued gains in after-hours trading by 0.16 percent.
2023-07-19 03:48:00
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