Bank of America reported better-than-expected second-quarter earnings and revenue on Tuesday, as the company benefited from higher interest income due to higher rates. The company earned 88 cents per share, compared to Refinitiv’s estimate of 84 cents, and generated $24.33 billion in revenue, compared with Refinitiv’s forecast of $24.05 billion.Bank of America reported earnings of 88 cents per share for the fourth quarter, up from 73 cents per share a year ago. Revenue rose 11% to $24.33 billion, driven by a 14% increase in net interest income, which was broadly in line with FactSet’s estimate.
“We remain optimistic about the economic fundamentals in the United States, where the economy continues to grow at a healthy pace and the job market remains resilient,” CEO Brian Moynihane said in a release. “We have seen continued organic client growth and activity across our businesses, which have been offset by the positive effects of higher interest rates.”In premarket trading, Bank of America shares rose less than 1%, Bank of America was supposed to benefit the most from higher interest rates this year but that hasn’t been the case. Net interest income, which is one of the bank’s main sources of revenue, has been in question as loan growth and deposit growth have slowed down. Last week, BofA’s biggest rival, JPMorgan Chase, reported a whopping 67% increase in quarterly net interest income.Shares of BofA had fallen about 11 percent this year before Tuesday’s earnings announcement. The KBW Bank Index has fallen about 20 percent this year.The Consumer Financial Protection Bureau fined BofA earlier this month for customer abuses, including fake accounts and fake fees. Analysts will likely ask CEO Brian Moynihan if those issues have been addressed.JPMorgan, Citigroup and Wells Fargo each reported earnings on Friday that beat analysts’ expectations due to higher interest rates. On Tuesday, Morgan Stanley reported earnings. Goldman Sachs wrapped up big bank earnings on Wednesday.