Bank of America Q2 profits drop as higher interest rates slow down lending

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Bank of America Q2 profits drop as higher interest rates slow down lending
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Bank of America said Tuesday its profits fell in the second quarter, as higher interest rates ate into expenses, including its large consumer banking franchise.

A Bank of America ATM is seen, Wednesday, Feb. 3, 2021, in Winchester, Mass. Bank of America said Tuesday, July 16, 2024, its profits fell in the second quarter, as higher interest rates ate into expenses, including its large consumer banking franchise. But like Goldman Sachs, Bank of America saw a resurgence of activity in its investment banking division, which helped make up for some of the weakness in other parts of the business.

While Bank of America did see higher loan growth and more return on its assets in the quarter, much of the bank's interest income was eaten up by higher interest expenses. Bank of America traditionally keeps a balance sheet of shorter-term securities, so when the Federal Reserve raised interest rates, BofA had to finance at the higher rate more quickly than its peers.

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