Higher rates help Bank of America beat Q2 estimates

(Sharecast News) - Bank of America posted a sharp rise in both its top and bottom lines thanks to higher interest rates.

"Continued organic client growth and client activity across our businesses complemented beneficial impacts of higher interest rates and produced an 11% increase in revenue. We continue to see a healthy U.S. economy that is growing at a slower pace, with a resilient job market," group chairman and chief executive officer, Brian Moynihan, said.

The lender, one of the country's largest, said that revenues, net of interest expense, jumped by 11% over the three months ending on 30 June to reach $25.2bn (FactSet: $24.98bn).

Net income meanwhile strengthened by 19% to $7.4bn for earnings per share of 88 US cents (FactSet: 84 cents).

Driving the lender's gains, net interest income shot up by 14% or $1.7bn to $14.2bn.

A total of $1.1bn in credit provisions were booked, for an increase of $602m in comparison to the year earlier period.

Average deposits fell by 7% to $1trn, but remained 40% above their pre-pandemic levels.

As of 1217 BST, shares in Bank of America were edging up 0.51% to $29.55.