Bank of America beats forecasts as Q2 profits jump 27%

(Sharecast News) - Bank of America beat analysts' estimates with a surge in second-quarter profits, aided by improved consumer confidence, strong client activity in stock trading, and the bank's investments in artificial intelligence.

Net profits over the three months to 30 June totalled $9.1bn, up 27% from the $7.2bn reported a year earlier. Earnings per share of $1.21 were 34% ahead of last year and topped the market forecast of $1.13.

Revenues came in at $31.6bn, up 15% year-on-year and ahead of estimates, helped by higher net interest income, sales and trading revenue, asset management fees and investment banking fees.

Revenues from stock trading in particular surged 70% year-on-year to $3.6bn, some $1bn ahead of analysts' predictions, due to increased client activity, and strong trading performances in Asia and the US.

Meanwhile, net interest income rose 9% to $16.0bn, with the company now guiding to full-year NII growth at the top end of the 6-8% target range.

Meanwhile, the average tangible common equity improved to 17.0% from 16% in the first quarter and 13.6% the year before, in line with the bank's 16-18% target range and comfortably above the 15.8% expected by analysts.

Chair and chief executive Brian Moynihan said the bank delivered "one of our strongest quarters to date", with every business segment seeing double-digit net income growth and strong returns on equity.

"Revenue increased 15% from last year as we deepened relationships with existing clients and welcomed new ones. Against a healthy economic backdrop, resilient consumers and businesses are turning to Bank of America to spend, borrow and invest," he said.

BAC shares were up 2.1% at $60.74 by 1514 BST.