Bank of America (BAC) has reported a beat on its earnings expectations for the fourth quarter, driven by a surge in trading revenue and improved interest income. The lender’s net income rose to $6.7 billion, or 82 cents per share, beating analyst estimates.
The bank’s sales and trading revenue jumped 10% to $4.1 billion, with fixed income revenue rising 13% due to strong performance in macro products and credit. Equity markets rallied in the fourth quarter following the US elections, fueling client activity and equities revenue growth of 6%.
BofA’s wealth and investment management division also benefited from surging equities, attracting more client money and driving revenue up 15%. Client balances jumped 12% to a record $4.3 trillion.
The bank forecasts higher interest income in 2025, driven by a steeper yield curve and improved macroeconomic conditions. Net interest income rose 3% to $14.4 billion in the quarter, beating analyst expectations.
BofA’s CEO Brian Moynihan said the broad momentum sets up 2025 well, with every source of revenue increasing and the bank seeing better-than-industry growth in deposits and loans. The lender expects net interest income to grow further in the coming quarters, driven by a combination of a steeper yield curve, less pressure on deposit costs, and modest loan growth.
Shares rose 0.2% in early trading following the earnings release.
Source: https://www.reuters.com/business/finance/bank-america-profit-rises-investment-banking-boost-2025-01-16