Bank of America today said second-quarter net income grew 12 per cent and beat Wall Street's expectations with earnings driven by rising income from credit cards and investment gains.
The financial-services giant, which is acquiring MBNA, said net income grew to $4.3 billion, or $1.06 a share, from $3.85 billion, or 93 cents a share, a year earlier.
Second-quarter revenue rose 7 per cent to $14.2 billion from $13.2 billion. Provisions for loan losses rose to $875 million from $789 million.
It said savings realised from its acquisition of Fleet last year also helped results.
"The revenue increase was primarily due to strong noninterest income growth, led by the growth in card income and service charges, the bank said in a press release.
A survey of analysts by Thomson First Call has estimated earnings at $1.01 a share.
The latest quarter included a $121 million pretax merger and restructuring charge, which cut per-share earnings by 2 cents.
Net interest income at the bank rose 1 per cent to $7.84 billion, despite a flattening yield curve, which cuts the profit banks make on loans. Bank of America said a growing loan portfolio and higher deposit levels offset the negative effects of the flatter yield curve.
The company said investment banking earnings rose 12 per cent to $461 million, but that was against a previous second quarter that included a large litigation charge. Revenue at the investment bank fell 19 per cent to $2.12 billion, "in the face of weak market conditions," the bank said.
The results were in contrast to rival Citigroup's results. Citi missed analysts' estimates and its shares fell, pressuring the broader market.
Shares of Bank of America rose 17 cents to $45.98 on Friday.