Bank of America reported a profit of $7.4 billion last quarter, up nearly 20 percent from a year ago.
Revenue rose more than 10 percent to $25.2 billion in the second quarter.
Bank of America has nearly $2 trillion in customer deposits, but like most banks, it is seeing a decline as customers move their money to higher-return accounts: Bank’s average deposit size a year ago Compared to the second quarter, it has decreased by about 7 percent.
The bank also continued to make progress on the goal it set earlier this year: reducing its workforce through job attrition. The bank, which had 288,000 employees in 2010, is now down to about 213,000 (excluding summer interns), about 4,000 fewer than a quarter ago. “It sets us up for a good trajectory of spending going forward,” Mr Borthwick said.
The bank’s Chief Executive Brian Moynihan described the quarter as one of the strongest in the bank’s history.
“We are seeing a healthy US economy that is growing at a slower pace with a resilient job market,” he said. It echoes comments from their counterparts at other big banks, and comes as economists debate the possibility of a so-called soft landing, in which inflation is eased without massive job losses or a significant slowdown in economic growth. . The bank said customer spending on credit and debit cards rose 3 percent to $226 billion.
Notably, the lender’s investment-banking business took a hit in the second quarter as a sharp drop in bargaining power cooled the industry. The investment banking unit’s fees rose 7 percent to $1.2 billion, and its trading revenue rose 3 percent to $4.3 billion.
“I think this is probably the most important highlight of the quarter in the global banking business,” said Alistair Borthwick, the bank’s chief financial officer. “We have got a slight edge in the equity capital markets and this is a welcome sign for us.”
The four biggest US banks – Bank of America, Citigroup, JPMorgan Chase and Wells Fargo – have now reported profits of nearly $30 billion in the second quarter, up 30 percent from a year ago.
But large fines for misdemeanors remain a regular expense at the biggest banks. Last week, Bank of America was fined $150 million by two federal regulators for charging its customers unfair fees and refusing to deliver promised sign-up bonuses. The bank reported litigation costs of $276 million last quarter, up from $89 million in the previous quarter, “driven by settlements on consumer regulatory matters.”
The bank is also preparing to bring a bill for the failures of three regional banks this year. Bank of America said its charges in the second half of this year could include accruals of $1.9 billion if the Federal Deposit Insurance Corporation finalizes an assessment on failing banks to cover the cost of protecting uninsured deposits. gives form.
what will happen next
Analysts will be closely watching results on Wednesday from Goldman Sachs, which is struggling to recover from an unfortunate move in consumer banking. They will also scrutinize smaller banks such as Western Alliance as the lender’s leaders try to shake off the fallout from bank failures this year that have thrown the entire regional banking sector into turmoil.