July 16 (Reuters) - Bank of America's profit fell in the second quarter as its income from interest on loans shrank and it set aside more money to cover potential credit losses.
A better-than-expected forecast for fourth-quarter net interest income (NII), however, sent shares up 1% in premarket trade.
"The strength and earnings power of our leading consumer banking business is complemented by the growth and profitability of our global markets, global banking, and wealth management businesses," CEO Brian Moynihan said in a statement on Tuesday.
The second biggest U.S. lender earned $6.9 billion, or 83 cents per share, in the second quarter ended June 30, compared with $7.4 billion, or 88 cents per share, a year earlier, it said in a statement.
Banks are shelling out more on deposits as interest rates are at their highest since 2007, which have boosted returns on bonds, making alternatives such as money market funds more attractive.
The cost of preventing a deposit drain has eroded banks' gains from the rising interest payments that they are charging borrowers.
The second biggest U.S. lender earned $6.9 billion, or 83 cents per share, in the second quarter ended June 30, compared with $7.4 billion, or 88 cents per share, a year earlier, it said in a statement.
Banks are shelling out more on deposits as interest rates are at their highest since 2007, which have boosted returns on bonds, making alternatives such as money market funds more attractive.
The cost of preventing a deposit drain has eroded banks' gains from the rising interest payments that they are charging borrowers.
Mergers and acquisitions are also gaining momentum, boosting advisory fees for investment banks. BofA's investment banking fees jumped 29% to $1.6 billion.
The unit faced tougher year-over-year comparisons versus peers. In the second quarter of 2023, BofA's investment banking fees grew 7%, while JPMorgan Chase and Citigroup had reported a drop.
Reporting by Niket Nishant in Bengaluru and Saeed Azhar in New York; editing by Lananh Nguyen and Shinjini Ganguli
Source: Reuters