Bank of America’s Second Quarter Highlights Big Bank Earnings Advantage

Despite second-quarter profits dropping at Bank of America by 7% year over year, the earnings report was considered a win due to investment banking fees.

The revenue diversity advantage highlights a major edge that global banks have in comparison to community banks. Trading revenue also helped one of the nation’s largest banks.

Higher interest rates continue to negatively impact traditional retail banking margins. While net income fell by almost $7 billion, its total revenue managed to increase.

The earnings report confirmed similar trends previously reported at JPMorgan Chase and Citigroup.

Bank of America reported that it expected net interest income to rise as the Federal Reserve lowers interest rates, with fourth quarter income $600 million higher than second quarter. But the key story is that investment banking fees were up almost 30%, a trend that is expected to continue for the foreseeable future.