BoA Gains as Interest Income, Demand for Advisory Services Grow
Investing.com
Published Jan 19, 2022 08:31AM ET
By Dhirendra Tripathi
Investing.com – Bank of America stock (NYSE:BAC) traded 2.7% higher in premarket Wednesday after the company’s fourth-quarter numbers pointed to robust developments both in lending and in its fee-based businesses.
Net interest income, a bank’s bread-and-butter metric that measures the difference between the interest earned on loans and paid out on deposits, rose $1.2 billion or nearly 11% to cross $11 billion. At the end of the year, the bank’s deposit balances were up 16% year-on-year and topped $1 trillion, rising $100 billion of deposits during the last quarter alone.
Chief Financial Officer Alastair Borthwick said asset quality remained strong with loss rates at historically low levels as the global economy continued to improve. This enabled the lender to release $851 million in loan loss reserves as contingencies the bank had estimated didn’t materialize. The release boosted profits, which were higher by 28% at $7 billion.
Combined spending on credit and debit cards grew 22% to $212 billion in the quarter, the bank said.
The bank also benefited from strong demand for its investment advisory services in a booming market for M&As, fund-raising, public offerings and corporate restructuring.
Noninterest income was up 8% to near $11 billion. Bioth asset management and investment banking notched record revenue for the quarter.
As at its Wall Street rivals, BofA's bond trading business suffered from rising government yields at the end of a volatile year for markets. Revenue in the fixed-income, currency and commodity business declined to $1.6 billion. Equities revenue rose to $1.4 billion, however.
Total revenue, net of interest expense, increased 10% to exceed $22 billion.
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Written By: Investing.com
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