Bank of America has today reported a 173% jump in second-quarter profit as it released reserves it had set aside last year at the height of the pandemic, but revenues remained weak and the bank flagged high expenses.
The bank's net income applicable to common shareholders rose to $8.96 billion, or $1.03 per share, from $3.28 billion, or 37 cents per share, a year earlier.
Analysts on average had expected a profit of 77 cents per share, according to IBES estimate from Refinitiv.
The Federal Reserve last year brought in ultra-low interest rates to allow for a more rapid recovery from the pandemic-induced recession.
Such low rates eat into the income of lenders like Bank of America, which make profit from the difference between what they earn on loans and pay out on deposits.
Strong momentum in job growth and vaccinations against Covid-19 have underpinned a recovery in the broader economy, However, Wall Street's biggest banks are still expected to feel the pinch from low rates.
Executives at JPMorgan Chase & Co warned this week that the sunny outlook for the US economy would not make for blockbuster revenues in the short term due to low interest rates, weak loan demand and a slowdown in trading.
Bank of America, the second-largest U.S. bank by assets, released $2.2 billion of reserves in the quarter, reflecting the improved economic outlook.
The release, however, was lower than the $2.7 billion it had set aside in the previous quarter.
Overall revenue, net of interest expense, dropped 4% to $21.5 billion, the bank said.
