January 16, 2025
(Bloomberg) -- Bank of America Corp. posted fourth-quarter profit that topped analysts’ estimates as investment-banking fees hit the highest in three years and net interest income outperformed forecasts.
Investment-banking fees jumped 43% to $1.69 billion in the fourth quarter, according to a statement Thursday. Net interest income also rose in the quarter, climbing 3% to $14.4 billion. That’s more than analysts were expecting for NII, the revenue collected from loan payments minus what depositors are paid. Still, non-interest expenses of $16.8 billion came in slightly higher than analysts forecast.
“Every source of revenue increased, and we saw better than industry growth in deposits and loans,” Chief Executive Officer Brian Moynihan said in the statement.
Bank of America’s results offer another look at how US consumers and businesses are faring as the Federal Reserve starts lowering borrowing costs for the first time in almost half a decade. Lenders’ balance sheets overall have remained resilient, though uncertainties remain with geopolitical tensions and changes under President-elect Donald Trump’s administration.
The second-largest US lender said that its deposits and loans both grew in the fourth quarter, topping estimates. Bank of America’s loans reached almost $1.1 trillion, higher than the $1.08 trillion estimate. Lending has been a key focus for investors, with lower interest rates expected to spur borrowing as it becomes less costly. Deposits also grew 2.2% to almost $1.97 trillion, beating analysts’ expectations for a 1.2% increase.
The company’s strong performance in investment banking also buoyed non-interest income, which climbed 37% to almost $11 billion. Sales and trading also saw strong momentum, growing 10% to $4.13 billion during a period of volatile market swings around changing interest rates and the US election. The unit, led by Jim DeMare, also notched an annual record in 2024.
On Wednesday, JPMorgan Chase & Co. and Goldman Sachs Group Inc. reported earnings that beat analysts’ estimates, with executives pointing to a surge in investment banking and trading boosting results to records. Both banks expect the incoming presidential administration to ease regulatory oversight.
Shares of Charlotte, North Carolina-based Bank of America were little changed at 9:37 a.m. in New York.
Looking ahead, the bank is signaling more growth for key metrics including net interest income. The firm expects NII of $14.5 billion to $14.6 billion in the first quarter of 2025, rising to $15.5 billion to $15.7 billion in the fourth quarter, according to a presentation Thursday.
“The biggest part of our confidence as it relates to 2025 comes from our confidence around deposit growth,” Chief Financial Officer Alastair Borthwick said on a conference call with reporters Wednesday. “A pickup in loan demand is consistent with a degree of confidence and optimism around the future prospects of the economy.”
The bank’s full-year NII guidance was provided on a fully taxable-equivalent basis.
--With assistance from Keith Gerstein.
(Updates with shares in eighth paragraph.)
