Source Credit : Reuters
Bank of America beat profit estimates for the latest three-month period on Wednesday as its traders brought in more revenue from tumultuous markets, while interest income rose for a fourth straight quarter.
Banks' trading desks benefited from market turbulence during the second quarter as clients reacted to shifting U.S. trade policies and escalating geopolitical tensions.
The bank's shares, which have gained 5% this year, rose 1% in trading before the bell.
Peers JPMorgan Chase and Citigroup also beat second-quarter profit estimates, helped by gains in their trading divisions.
BofA's sales and trading revenue jumped 15% to $5.4 billion in the quarter, the 13th consecutive quarter of year-over-year revenue growth.
In trading, equities revenue surged 10%, while fixed income, currencies and commodities (FICC) revenue jumped 16% in the quarter.
"Consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilization rates rose. In addition, we saw good momentum in our markets businesses," CEO Brian Moynihan said in a statement.
BofA's investment banking fees slid 9% to $1.4 billion in the second quarter, lagging behind rivals. Investment banking fees rose 7% at JPMorgan, 13% at Citigroup and 9% at Wells Fargo, which benefited from rebounding activity at the end of the quarter.
Dealmaking was stalled in April by uncertainty over U.S. President Donald Trump's shifting trade policies, geopolitical tension and elevated interest rates. However, banking executives and analysts have expressed optimism about the M&A pipeline and foresee more transactions in the second half of the year.
Last month, BofA had projected investment banking fees to be roughly $1.2 billion, while trading revenue was expected to grow by mid- to high-single digits.
BofA's profit was $7.1 billion, or 89 cents per share, for the three months ended June 30, compared with $6.9 billion, or 83 cents per share, a year earlier.
Wall Street had expected BofA to earn 86 cents a share in the quarter, according to estimates compiled by LSEG.
