Bank of America Corp. said its second-quarter profit rose 10% as rising short-term interest rates offset a trading slump.
Quarterly profit at the Charlotte, N.C.-based bank was $5.27 billion, compared with $4.78 billion a year ago. Per share, earnings were 46 cents. Analysts had expected 43 cents a share.
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Second-quarter revenue was $23.07 billion, from $21.51 billion a year ago. Analysts had expected $21.78 billion.
Bank of America shares have rallied of late, climbing 41% since the November election. The initial share-price gains after Donald Trump's surprise victory have been sustained as the lighter regulatory touch investors hoped for has started to materialize. Short-term interest rates have also kept moving higher with the jobs picture strengthening, aiding the bank's results.
In late June, Bank of America got Federal Reserve approval for a large increase in its dividend and stock buybacks. Since then, the bank's stock has regularly traded above its book value, a level it never reached between the financial crisis and the start of 2017.
But the lender, the second largest U.S. bank by assets, faced challenges in the second quarter. The bank warned trading revenue would be under pressure. Excluding adjustment, sales and trading revenue fell 9%, hurt by a 14% slide in the fixed income division.
Also, long-term interest-rates reversed and started moving lower during part of the quarter, which contributed to the lender trimming its expectations for growth in net interest income. Similar factors weighed on earnings reports from J.P. Morgan Chase & Co. and other big lenders that reported their earnings on Friday.
The bank's provision for credit losses improved to $726 million from $976 million a year earlier.
Bank of America shares fell 0.7% in premarket trading.
Write to Rachel Louise Ensign at email@example.com
(END) Dow Jones Newswires
July 18, 2017 07:13 ET (11:13 GMT)