Solid loan growth and a tight grip on expenses added support to stronger-than-expected fourth quarter earnings for Bank of America.
Updated at 7:20 am EST
Bank of America (BAC) – Get Bank of America Corp Report posted stronger-than-expected fourth quarter earnings Wednesday while noting that overall expenses would only rise marginally this year, removing a key profit risk from an otherwise solid near-term outlook.
Bank of America said profit for the three months ended in December were tabbed at 82 cents per share, up 28.8% from the same period last year and 6 cents ahead of the Street consensus forecast of 76 cents per share.
Group revenues, the bank said, rose 10% from last year to $22.1 billion, falling just shy of estimates of a $22.23 billion tally. Net interest income rose 11% to $11.4 billion, the bank said, while total loans were up 8%. to $979 billion.
Non-interest expenses for 2022, Bank of America said, would include around $400 million in personnel costs this quarter, but would remain ‘approximate’ to the levels seen in 2021.
“Our fourth-quarter results were driven by strong organic growth, record levels of digital engagement, and an improving economy,” said CEO Brian Moynihan. “We grew loans by $51 billion and added $100 billion of deposits during the quarter, further strengthening our position as the leader in retail deposits.”
“We earned a record $32 billion in 2021, with every business line solidly contributing,” he added. “Investment Banking had its best year ever and Global Markets had its highest sales and trading revenue in a decade, led by record Equities performance as we invested in the business.”
Bank of America shares were marked 2.7% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $47.50 each.
Wall Street banks have posted a mixed collection of fourth quarter earnings so far this reporting season, with JPMorgan (JPM) – Get JPMorgan Chase & Co. Report cautioning that net interest income, a key profit metric, will likely fall from last year’s levels and Goldman Sachs (GS) – Get Goldman Sachs Group, Inc. Report noting rising expenses — including billions in bonus payments — ate into its bottom line.
