· Event impact
Bank of America Revenue Up 15% on Trading and Investment Banking Strength
Transmission path
Capital market activity recovery offsetting stagnant net interest income.
Market mechanism
Capital market activity recovery offsetting stagnant net interest income.
Extended read
Bank of America's Q2 results mirror the trend seen at JPMorgan and Goldman Sachs, where a resurgence in deal-making and trading volume has bolstered the bottom line. This suggests a broader recovery in capital markets that is benefiting the largest US financial institutions. While the 34% earnings growth is impressive, the fact that 60% of the revenue increase came from trading and investment banking highlights the cyclical nature of current gains. Investors will be looking for signs of sustained loan growth and net interest margin stability in future quarters.
Exposed assets
BAC
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