Bank of America shares fell 1.58% after the bank reported a net income of $5.21 billion or 59 cents per share in the fourth quarter, according to the BofA press release. The earnings were better-than-expected profit of 55 cents per share, but below $6.75 billion or 74 cents per share, a year earlier.
- Overall, BOA reported a 10% fall in revenue, net of interest expense, to $20.1 billion.
- Revenues from sales and trading business rose to $3 billion from $2.8 billion a year earlier
- Net income from global markets rose 38% to $791 million, while equities trading revenue gained 30%
- Fixed income, currencies, and commodities revenue fell 5%, while consumer banking revenue fell by 13% to $8.2 billion due to lower interest rates.
- BOA now projects to grow its net interest income (NII) even as the pandemic led to a decline in loans by 2% and a 6% fall in credit card spending during the quarter.
- The bank’s net interest income (NII) fell 16% from a year earlier despite rising in the fourth quarter from a low-point in the third quarter.
- The bank will release $828 million from its reserves to cover bad loans after adding more than $8 billion through the first three quarters of the year.
- About 75% of BOA reserve release is tied to the bank’s consumer portfolio due to better-than-expected financial health pegged on fiscal stimulus.
- BOA board approved a $3.2 billion share repurchase program in the first quarter.
Bank of America stock is currently gaining. BAC: NYSE is up 0.64%
