Bank of America Profit Jumps 27% on Broad Loan Growth and Trading Surge

Bank of America reported a 27 percent jump in second-quarter profit to $9.1 billion, driven by broad-based loan growth and a surge in trading revenue. Earnings per share climbed 34 percent year over year, sending the bank’s stock up 2 percent in morning trading.

The results provide reassurance to investors monitoring the resilience of the US consumer amid higher gas prices linked to the Iran war. Chief Executive Brian Moynihan emphasized this durability during the post-earnings conference call.

"The U.S. economy has proved more durable than expected, supported by the strong consumer, ongoing AI-driven investments across the board, and easing energy costs," Moynihan said. He added that the bank continues to see strong consumer spending.

Net interest income reached $16 billion, edging past the $15.92 billion consensus estimate. Management guided full-year net interest income to the upper end of a 6 percent to 8 percent growth range, a projection analysts on the call characterized as conservative.

Chief Financial Officer Alastair Borthwick attributed the cautious outlook to historical comparisons rather than weakening demand. "We're just up against tougher comps. That's all," he explained.

Trading desks delivered a standout performance, with stock-trading revenue jumping 70 percent to $3.62 billion. This figure smashed Wall Street consensus by nearly $1 billion, fueled by heightened client activity in the US and Asia.

Broad Sector Strength

Lending growth extended well beyond artificial intelligence sectors, with consumer banking and lending revenue growing 6 percent year over year. Commercial banking revenue saw identical growth, as Borthwick emphasized that business, commercial, and corporate banking divisions are all contributing to very broad-based loan growth.

The strong results mirror a broader positive trend among major US lenders. Wells Fargo also exceeded second-quarter expectations, supported by a 13 percent year-over-year revenue increase in wealth management and investment banking.

"We are clearly benefitting from the broad-based economic strength we see in the US," Chief Executive Charlie Scharf said. He added that the bank's investments and improved operating discipline drove strong momentum in key business metrics across all operating segments.

Citigroup similarly beat estimates, posting net interest income of $17.13 billion against expectations of $16.01 billion. Its equities sales and trading revenue also surpassed forecasts, reaching $2.3 billion compared to the expected $1.98 billion.