Bank of America is enjoying more income from loans because of higher interest rates.
Bank of America is enjoying more income from loans because of higher interest rates.
Photo: Spencer Platt, Getty ImagesBofA reports profit up 10%
Consumer banking giant Bank of America reported a 10 percent rise in second-quarter profit Tuesday as gains from higher interest rates were more than enough to offset a drop in trading revenue.
The nation’s second-largest bank said it earned $5.27 billion (49 cents per share), compared with $4.78 billion (43 cents) in the same period a year earlier. The results beat analysts’ forecasts of 43 cents.
Like its competitors, Bank of America benefited from rising interest rates. The Federal Reserve has raised interest rates three times since December, which has allowed banks to charge higher interest rates to borrowers when they take out loans.
Because of its large consumer banking division, Bank of America’s fortunes are more directly tied to interest rates than rivals that have large trading divisions. Bank of America’s net interest income increased 9 percent in the quarter to $10.99 billion.
New Mexico
Facebook data
center grows
Facebook’s plans for New Mexico now call for a $500,000 investment and a data center that will span an area equal to 17 football fields.
Gov. Susana Martinez’s office said Tuesday that the Menlo Park social media company will double its investment in the state with the planned expansion of its data center under construction just outside of Albuquerque.
The governor said Facebook is among the state’s key partners in diversifying its economy.
It broke ground on the center in October, and the second building is expected to keep construction crews busy through 2020.
More than 280,000 hours of work on the project have been logged, more than 3 million cubic yards of dirt have been moved and more than 30,000 cubic yards of concrete have been poured, Facebook said.
Broadband
Google Fiber
boss leaves
Another leader of Alphabet’s high-speed Internet business is stepping down. Gregory McCray was hired in February as CEO of Access, the Alphabet unit that houses Google Fiber. Craig Barratt, the former Access boss, left in October when a big expansion plan he created was cut back.
“We are committed to the success of Google Fiber. The team is bringing gigabit connections to more and more happy customers,” Alphabet CEO Larry Page said in a statement.
A few years ago, Google Fiber was a big priority, but when Barratt stepped down, it said it was halting plans to expand into eight additional markets. In April, two of Barratt’s top deputies also left.
Streaming video
Netflix up 13%
Netflix shares soared after the streaming-video provider scored a record second quarter, surpassing forecasts for subscriber growth and boosting its international audience past the domestic total for the first time.
Investors continue to forgive minuscule profit for growth in subscribers, which rose to almost 104 million in the period. Shares jumped 13.5 percent to close at $183.60, their biggest increase since October. Netflix shares have risen 78 percent in the past year.
The second-quarter results show how Netflix has begun to reshape the TV business overseas.
Chronicle News Services
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