The Numbers

Financial institution of America reported a revenue of $7.4 billion final quarter, up practically 20 % from the 12 months earlier than.

Income grew greater than 10 %, to $25.2 billion within the second quarter.

Financial institution of America holds practically $2 trillion in buyer deposits, however like most banks, it’s seeing declines as prospects transfer their cash to accounts with greater returns: The financial institution’s common deposits dropped round 7 % within the second quarter, versus a 12 months in the past.

The financial institution additionally continued to make progress on a aim it laid out earlier this 12 months: shrinking its head depend by attrition. The financial institution, which had 288,000 workers in 2010, is now right down to about 213,000 (excluding summer season interns), roughly 4,000 fewer than 1 / 4 in the past. “That units us up for trajectory on expense going ahead,” mentioned Alastair Borthwick, the financial institution’s chief monetary officer.

Takeaways

Brian Moynihan, the financial institution’s chief government, known as the quarter one of many strongest within the financial institution’s historical past.

“We proceed to see a wholesome U.S. financial system that’s rising at a slower tempo, with a resilient job market,” he mentioned. That echoed feedback from his counterparts at different huge banks, and comes as economists debate the chance of a so-called comfortable touchdown, through which inflation subsides with out massive job losses or a major slowdown in financial development. Buyer spending on credit score and debit playing cards rose 3 %, to $226 billion, the financial institution mentioned.

Notably, the lender’s investment-banking enterprise rebounded within the second quarter, after a pointy drop in deal-making had forged a chill over the business. The funding banking unit’s charges rose 7 %, to $1.2 billion, and its buying and selling income rose 3 %, to $4.3 billion.

“That’s in all probability crucial spotlight of the quarter, I believe, within the world banking enterprise,” Mr. Borthwick mentioned. “We’ve received a bit of little bit of choose up in fairness capital markets, and that’s been a welcome signal for us.”

Context

America’s 4 largest banks — Financial institution of America, Citigroup, JPMorgan Chase and Wells Fargo — have now reported practically $30 billion in revenue for the second quarter, up greater than 30 % from a 12 months in the past.

However massive penalties for misdeeds stay a routine expense on the largest banks. Final week, Financial institution of America was fined $150 million by two federal regulators for charging its prospects improper charges and denying them promised sign-up bonuses. The financial institution reported $276 million in litigation prices final quarter, up from $89 million the earlier quarter, “pushed by agreements reached on client regulatory issues.”

Banks are additionally bracing for a invoice for the failures this 12 months of three regional banks. Financial institution of America mentioned its bills within the second half of this 12 months may embrace a $1.9 billion accrual if the Federal Deposit Insurance coverage Company finalizes an evaluation on banks to cowl the prices of defending failed banks’ uninsured deposits.

What’s Subsequent

Analysts will likely be carefully watching outcomes on Wednesday from Goldman Sachs, which has struggled to get better from an ill-fated foray into client banking. They’ll additionally scrutinize smaller banks like Western Alliance as these lenders’ leaders attempt to shake off the consequences of the financial institution failures this 12 months that threw the whole regional banking sector into turmoil.