Net interest income at Bank of America slipped on a YoY basis for the second consecutive quarter in Q2, according to results released on Tuesday.
$13.7 billion (the GAAP print) was the lowest since the Fed started hiking rates. NII slipped sequentially as well, falling $300 million from Q1 on higher deposit costs.
Don’t fret, though. These are still very large hauls and besides, Q2 was likely the low for the year. The deck suggested NII will be $14.5 billion in Q4. The forecast appeared to assume a trio of rate cuts over the balance of the year.
Last month, Brian Moynihan indicated Q2 was the trough for NII at BofA.
BofA’s earnings releases aren’t especially lively affairs, but it’s worth recalling that the bank’s traders turned in their best overall quarter in years in Q1. Fast forward three months and the firm’s equities business stood out again.
Equities sales and trading revenue of $1.94 billion rose 20% YoY and blew past estimates. The Street was looking for $1.73 billion.
FICC was a little light at $2.74 billion (versus $2.8 billion expected), but overall sales and trading revenue of $4.68 billion rose 9% from the same period a year ago, the biggest 12-month gain since Q4 of 2022.
Moynihan praised the business. “Global Markets delivered its ninth consecutive quarter of YoY revenue growth in sales and trading, earning double-digit returns,” he said. “Our investments in this business are delivering for our shareholders.”
In IB, BofA notched another beat. On the heels of a solid Q1, Q2 IB revenue of $1.56 billion comfortably topped the $1.45 billion consensus. Debt underwriting brought in $880 million, ECM $357 million and advisory $374 million.
Running quickly through the rest of the numbers, wealth management revenue was in-line at $5.57 billion, the provision was an as-expected $1.51 billion, non-interest expenses of $16.31 billion likewise matched expectations, comp costs overshot consensus ($9.83 billion versus $9.77 billion expected) and total deposits of $1.91 trillion fell a little short of the $1.93 trillion analysts saw. Loans and leases were $1.05 trillion.
All in all, the results were fine. Better than fine, probably. There were no big misses, there were several beats and nothing stood out as particularly alarming vis-à-vis the American consumer. Move along. Nothing to see here.
