Bank of America Corp (NYSE:BAC) reported a strong net income of $6.7 billion for Q4, with an EPS of $0.82, indicating solid financial performance. The company achieved revenue growth across all categories year-over-year, with a notable 15% increase in total revenue compared to Q4 2023.
The bank’s deposit growth has been strong, with six consecutive quarters of growth, reflecting a robust deposit franchise. Investment banking and sales and trading divisions performed well, with investment banking fees growing 44% year-over-year and sales and trading achieving a new full-year revenue record.
However, the bank faces ongoing compliance and control costs, as highlighted by a recent OCC compliance consent order, which could impact future expenses. Additionally, the commercial real estate loan portfolio saw an 8% decline year-over-year, indicating potential challenges in this sector.
Despite these challenges, the bank’s liquidity remains high at $953 billion, and its CET1 ratio of 11.9% may face pressure from potential regulatory changes. The net charge-off ratio, while stable, remains a concern with expectations to remain in the range of 50 to 60 basis points for 2025.
Net income for the full year 2024 reached $27.1 billion, and revenue grew to $102 billion. Capital return to shareholders was $21 billion, including an 8% increase in the common dividend.
Bank of America’s CFO explained that net interest income growth is driven by deposit growth, loan growth, and asset repricing. The bank has seen successive quarters of deposit growth and increased loan demand, which supports NII growth forecast.
The CEO mentioned that past performance in stable rate environments gives confidence in delivering 200 bps of sustainable operating leverage with revenue growing 4%-5% and expenses 2%-3%.
Source: https://finance.yahoo.com/news/bank-america-corp-bac-q4-070250839.html