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Bank of America Beats Second-Quarter Views Amid Investment Banking, Trading Gains

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Bank of America Beats Second-Quarter Views Amid Investment Banking, Trading Gains

Bank of America's (BAC) second-quarter results beat Wall Street's estimates on Tuesday as increased client activity helped drive sharp gains in investment banking fees and trading revenue.

The banking giant's per-share earnings increased to $1.21 for the June quarter from $0.90 a year earlier, surpassing the FactSet-polled consensus of $1.13. Total revenue, comprising net interest and noninterest income, rose 15% year over year to $31.56 billion, ahead of the Street's view for $30.78 billion.

"Every business segment reported double digit net income growth and strong returns on equity," Chief Executive Brian Moynihan said in a statement. "It was also an exceptional quarter for our markets-facing businesses, with investment banking fees up 50% year-over-year. Near-term, pipelines remain strong, and commercial borrowing has picked up."

Investment banking fees totaled $2.1 billion, reflecting strength across debt underwriting, advisory and equity underwriting. That helped push the global banking segment's revenue up 10% to $6.24 billion.

Global markets sales rose 34% to $8.02 billion, buoyed by a 33% jump in sales and trading revenue to $7.1 billion. The bank's equities revenue climbed 70%.

JPMorgan Chase (JPM), Goldman Sachs (GS) and Wells Fargo (WFC) posted stronger-than-expected second-quarter results Tuesday, driven by a surge in markets revenue and investment banking fees.

BofA Securities said last week that major US banks could top second-quarter earnings expectations amid gains from capital markets activity.

Revenue in Bank of America's global wealth and investment management division advanced 16% to $6.87 billion, boosted by a 19% jump in asset management fees that reflected higher market valuations and strong asset under management flows.

Bank of America's consolidated net interest income rose 9% to about $16 billion in the second quarter, while noninterest income increased to $15.56 billion from $12.77 billion in the prior-year quarter.

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