Bank of America (BAC) Q2 2024 earnings

bank of America on Tuesday said Second quarter revenue and profit exceeded expectations due to rising investment banking and asset management costs.

This is what the company reported:

• Income: 83 cents per share vs. 80 cents per share LSEG estimate
• Gain: $25.54 billion vs. $25.22 billion estimate

The bank said profit fell 6.9% from the same period last year to $6.9 billion, or 83 cents per share, as the company’s net interest income fell due to higher interest rates. Revenue rose less than 1% to $25.54 billion.

The company was helped by a 29% increase in investment banking expenses to $1.56 billion, beating the StreetAccount estimate of $1.51 billion. Asset management fees rose 14% to $3.37 billion, buoyed by higher share prices, allowing the company’s asset management division to post a 6.3% increase in revenue to $5.57 billion, essentially in line with the estimate.

Net interest income fell 3% to $13.86 billion, also in line with StreetAccount’s estimate.

But new guidelines for the metric, known as NII, gave investors confidence that a turnaround is in the works. NII is one of the main ways banks make money.

The measure, which is the difference between what a bank makes on loans and what it pays depositors for their savings, will rise to about $14.5 billion in the fourth quarter of this year, Bank of America said in a slide. presentation.

That confirms what executives previously told investors, namely that net interest income was likely to decline in the second quarter.

Shares of Wells Fargo fell on Friday as it posted disappointing NII figures, showing just how fixated investors are on the metric.

Bank of America shares rose 5.4%, helped by the NII guidance.

Last week, JPMorgan Chase,Wells Fargo and Citi Group each exceeded expectations for sales and profits, a streak that continued Goldman Sachs on Monday, helped by a recovery in activity on Wall Street.