NEW YORK, July 18 Reuters Bank of America39;s secondquarter profit beat Wall Street estimates as it earned more from customers39; loan payments while investment banking and trading fared better than expected.

The secondlargest U.S. lender projected its net interest income NII would increase 8 this year after it rose 14 in the second quarter, it said on Tuesday.

Bank of America joined rivals JPMorgan Chase and Wells Fargo in reaping windfalls from charging clients higher interest rates as the Federal Reserve raised borrowing costs to rein in stubborn inflation.

We continue to see a healthy U.S. economy that is growing at a slower pace, with a resilient job market, CEO Brian Moynihan said in a statement, echoing comments from his peers.

The company39;s stock surged 4.2 on Tuesday.

Bank of America39;s Q2 results continue to benefit from higher rates, but as clients continue to seek higher yields the pressure on BAC39;s net interest margin is growing, said David Fanger, senior vice president of the financial institutions group at rating agency Moody39;s.

The banks diversified mix of businesses and strong cost discipline offset some of this pressure, and deposit outflows slowed.

BofA reported a profit of 88 cents per share in the second quarter, beating analysts39; average expectations of 84 cents, according to IBES data from Refinitiv.

The result compared with 73 cents per diluted share a year earlier, the secondlargest U.S. bank reported on Tuesday.

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