(Reuters) – Bank of America’s profit fell in the second quarter as its income from interest on loans shrank and it set aside more money to cover potential credit losses.
The second biggest U.S. lender earned $6.9 billion, or 83 cents per share, in the quarter ended June 30, compared with $7.4 billion, or 88 cents per share, a year earlier, it said in a statement on Tuesday.
Banks are shelling out more on deposits as interest rates are at their highest since 2007, which have boosted returns on bonds, making alternatives such as money market funds more attractive.
The cost of preventing a deposit drain has eroded banks’ gains from the rising interest payments that they are charging borrowers.
BofA’s net interest income (NII) – the difference between what the bank earns on loans and pays out on deposits – fell 3% to $13.7 billion.
(Reporting by Niket Nishant in Bengaluru and Saeed Azhar in New York; editing by Lananh Nguyen and Shinjini Ganguli)
Comments