Last Thursday, January 16, Bank of America published information about its earnings for the fourth quarter of 2024, which exceeded analysts’ preliminary expectations regarding the dynamic of the relevant indicators.
The performance of the mentioned financial institution, headquartered in Charlotte, North Carolina, was driven by high readings of investment banking and interest income.
Bank of America’s revenue for the last quarter of 2024 was recorded at the $25.3 billion mark. This indicator showed an increase of 15% year-on-year. It is worth noting that the LSEG forecast stipulated that the revenue of the financial institution for the fourth quarter of 2024 would be fixed at the $25.19 billion mark. The upward dynamic of this indicator of lender’s activity is related to the growth of fees from investment banking and asset management. Also, as part of the increase in Bank of America’s revenue in the fourth quarter of last year, stronger trading results became an important impact factor.
The financial institution’s profit for the three-month period ended December 31 was recorded at the $6.67 billion mark. This indicator has more than doubled year-on-year. Earnings per share amounted to 82 cents. The preliminary forecast of LSEG stipulated that this indicator would be fixed at the 77 cents mark.
It is worth mentioning that in the fourth quarter of 2023, the financial institution had a $2.1 billion Federal Deposit Insurance Corp. assessment tied to the regional bank failures and a $1.6 billion charge tied to accounting on interest rate swaps.
Investment banking fees increased to $1.65 billion in the last quarter of 2024. This indicator grew by 44% year-on-year. At the same time, LSEG’s forecast stipulated that investment banking fees for the mentioned period would amount to less than $1.5 billion. It’s worth mentioning that last month, Bank of America chief executive officer Brian Moynihan told investors that the mentioned figure would grow by 25% in the quarter.
Fixed income revenue for the last three months of 2024 was recorded at the $2.48 billion mark. This indicator increased by 13% year-on-year. The mentioned result is approximately in line with the StreetAccount estimate. Equities revenue for the fourth quarter of 2024 increased by 6% year-on-year, reaching $1.64 billion. This result is essentially matching the preliminary expectations.
The financial institution’s net interest income for the fourth quarter of 2024 was recorded at the $14.5 billion mark. This indicator showed an increase of 3% year-on-year. The net interest income reported by the bank was about $170 million higher than the StreetAccount estimate.
It is worth noting that Bank of America is probably more dependent on interest rates and the impact of this figure on net interest income compared to other major financial institutions in the United States. Currently, investors are interested in how the lender assesses the prospects for its activities in 2025 and what goals it sets for itself for the corresponding period. This interest is largely because the Federal Reserve has moderated its intentions regarding cutting interest rates in the current year.
As we have reported earlier, U.S. Bancorp and PNC Predict Muted First-Quarter NII on Loan Demand.
