Bank of America’s profits slipped in the second quarter as results from the second-largest lender in the US pointed to the growing strain of higher interest rates on banks and borrowers.
BofA’s profits fell 7 per cent to $6.9bn, a smaller drop than the 10 per cent analysts had projected.
But BofA said interest income fell for the third quarter in a row, even as lending rose as customers demanded higher rates for their deposits.
The bank’s provision for loan losses also rose by more than a third from a year ago to $1.5bn. However delinquent loans, which peaked last quarter, fell $400mn in the quarter to $5.4bn.
Like other large banks, BofA benefited from a rebound in deals and other Wall Street activity. Fees from investment banking rose 29 per cent in the quarter from a year ago.
Revenue from sales and trading was up 7 per cent from a year ago, its ninth consecutive quarterly increase, and it best second-quarter showing in a decade.
Revenue was up 1 per cent from a year ago to $25.4bn.
“Our team produced another strong quarter, serving a growing client base,” BofA’s chief executive Brian Moynihan said.
The bank’s shares were up 2 per cent in pre-market trading.