Bank of America Corp, the No 2 US bank, on Monday said second-quarter profit rose 12 percent, helped by growth in credit card fees, retail deposits and commercial lending. Net income for the Charlotte, North Carolina-based company increased to $4.3 billion, or $1.06 per share, from $3.85 billion, or 93 cents per share, a year earlier.
Excluding merger and restructuring costs, profit was $1.08 per share, beating the average forecast of $1.01 from analysts polled by Reuters Estimates. The bank also realised $325 million of securities gains, down from $795 million.
Chief Executive Kenneth Lewis has been aggressively expanding Bank of America's consumer banking business, while investing $675 million to strengthen its investment bank.
In April 2004, he paid $48 billion for FleetBoston Financial Corp, and last month he agreed to pay $35 billion for MBNA Corp, the biggest independent credit card issuer. Also in June, Bank of America agreed to pay $3 billion for a 9 percent stake in China Construction Bank.
Revenue increased 7 percent to $14.2 billion, beating analysts' forecasts for $14.04 billion, while non-interest expense fell 3 percent to $7.02 billion.
The bank added 1.6 million credit card accounts and a net 568,000 savings and 629,000 checking accounts.
Lending income rose 1 percent to $7.84 billion, while fee income surged 16 percent to $6.37 billion. Deposits rose 10 percent to $635.4 billion, loans and leases rose 6 percent to $521.1 billion, and assets rose 22 percent to $1.25 trillion.
Bank of America said consumer and small-business banking earned $1.6 billion, down 8 percent, as the bank set aside more money for credit card charge-offs.
Total net charge-offs in the quarter rose 6 percent to $880 million, and Bank of America set aside $875 million for credit losses, up 11 percent.
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