Bank of America reported fourth-quarter earnings that exceeded Wall Street expectations, driven by stronger-than-anticipated performance in investment banking and interest income.
The bank disclosed earnings of $0.82 per share, surpassing analysts' estimates of $0.77, and revenue of US$25.3 billion, above the expectations of $25.12 billion.
Profit more than doubled to $6.67 billion, compared to the $2.1 billion Federal Deposit Insurance Corp. (FDIC) assessment and $1.6 billion accounting charge tied to interest rate swaps recorded in the same quarter of 2023.
Revenue saw a 15% increase, supported by a 44% surge in investment banking fees, which totalled $1.65 billion, exceeding projections by approximately $180 million. This growth reflects a robust year-end for Bank of America’s investment banking division, following CEO Brian Moynihan’s recent projection of a 25% rise in fees for the quarter.
Chair and Chief Executive Officer Brian Moynihan said: “We finished 2024 with a strong fourth quarter. Every source of revenue increased, and we saw better than industry growth in deposits and loans. We also ended with strong capital and liquidity, enabling us to return $21 billion of capital to shareholders in 2024.”
In trading, the bank's performance remained steady, with fixed income revenue rising 13% to $2.48 billion and equities revenue increasing 6% to $1.64 billion, both aligning with market expectations.
Notably, net interest income - an essential metric for the lender - grew by 3% to $14.4 billion, and is expected to grow sequentially to $15.5 - $15.7 billion in 4Q25.
Bank of America’s results come amidst strong performances from other major Wall Street firms. Earlier this week, JPMorgan Chase and Goldman Sachs also reported better-than-expected earnings, with Morgan Stanley set to announce its results later on Thursday (Friday AEDT).
At the time of writing, Bank of America (NYSE: BAC) stock was trading at US$46.64, easing 1% from Wednesday's close close of $47.10. The stock reached a day low of $45.82 and a day high of $47.51. Bank of America's market cap stands at US$357.86 billion (A$576.3 billion).