BAC Bank of America Corporation

By Rachel Louise Ensign 

U.S. consumers propelled Bank of America Corp. to an 8% increase in quarterly profit.

The Charlotte, N.C.-based bank, the second-largest in the U.S. by assets, posted a profit of $7.35 billion in the latest quarter, compared with $6.78 billion a year earlier. Per share, earnings were 74 cents. Analysts polled by FactSet had expected 71 cents per share.

Second-quarter revenue was $23.08 billion, up from $22.55 billion a year ago.

Other lenders posted earnings this week that showed strong consumer spending and borrowing but some weakness in business activity. Bank of America's earnings followed that same pattern: profit was up in consumer banking and wealth management, but down in its global banking and markets that cater to corporate clients.

Higher interest rates have boosted banks' performance since the Fed started raising them in late 2015. That is because banks were able to charge borrowers more interest without having to significantly increase payouts to depositors.

But now the Fed is signaling that it will move in the other direction and cut interest rates as soon as this month, clouding the outlook for banks' lending businesses.

Bank of America managed to keep a lid on interest-rate increases to customers in the second quarter. The bank paid 0.77% on U.S. interest-bearing deposits in the period, compared with 0.73% in the first quarter.

Net interest income rose 3% from a year earlier but fell about 1.5% from the prior quarter.

Loans at Bank of America were up 3% from a year earlier, while deposits rose 5% over that period. Expenses were roughly flat.

Bank of America, like other big banks, felt the effects of quiet markets in the second quarter. Trading revenue fell about 10%.

Write to Rachel Louise Ensign at rachel.ensign@wsj.com

(END) Dow Jones Newswires

July 17, 2019 08:01 ET (12:01 GMT)

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