Bank of America (BofA) reported a decline in profit in the second quarter, indicating an increasing burden from higher interest rates for banks and borrowers. The profit of the second-largest U.S. lender fell by 7 percent to $6.9 billion, a smaller decline than the 10 percent projected by analysts.

The net interest income of BofA fell for the third consecutive quarter, despite increased lending, as customers demanded higher interest rates for their deposits. Provisions for credit losses rose by more than a third compared to the previous year to $1.5 billion. However, non-performing loans, which had peaked in the last quarter, declined by $400 million in the quarter to $5.4 billion.

Like other major banks, BofA also benefited from a recovery in investment banking and other activities on Wall Street. Investment banking fees increased by 29 percent compared to the previous year. Revenues from sales and trading rose by 7 percent year-over-year, marking the ninth consecutive quarter of growth and the best second quarter result in a decade.

Revenue increased by 1 percent year-over-year to $25.4 billion. 'Our team delivered another strong quarter and served a growing customer base,' said BofA CEO Brian Moynihan.

The stocks of the bank rose by 2 percent in pre-market trading.

These results reflect the challenges and opportunities faced by large US banks in an environment of higher interest rates. While higher interest rates strain net interest income, they simultaneously offer opportunities in investment banking and trading.