Bank of America’s fourth-quarter income rose barely from a 12 months in the past, as larger credit score prices and probably unhealthy loans greater than offset the financial institution’s sharp rise in curiosity income.
The Charlotte, North Carolina-based financial institution stated Friday that it earned a revenue of $7.13 billion, or 85 cents a share within the three months ended Dec. 31, in comparison with a revenue of $7.01 billion, or 82 cents a share, in the identical interval a 12 months earlier. The outcomes have been higher than analysts’ forecast of a revenue of roughly 77 cents per share, in response to FactSet.
Like its main rivals, Bank of America noticed a pointy rise in curiosity revenue, helped by the Federal Reserve aggressively elevating rates of interest final 12 months to cease inflation. BofA’s curiosity income was roughly $3 billion larger than it was in 2021.
But additionally like JPMorgan Chase and others, BofA noticed a slowdown in its funding banking enterprise and needed to put aside more cash to cowl probably unhealthy loans. The financial institution had $1.1 billion in credit score reserves added this quarter; a 12 months earlier, the financial institution launched $500 million from that account.
Banks put cash apart to cowl probably unhealthy loans as their economists attempt to determine the place the U.S. and international economies are headed and use pc fashions to simulate how a lot in potential losses they could absorb these eventualities. Most banks have predicted that there could be a recession this 12 months on account of the Fed’s fee hikes.
JPMorgan Chase advised traders Friday that it’s now predicting a “mild” recession as a part of its outlook.
“We ended the year on a strong note growing earnings year over year in the (fourth) quarter in an increasingly slowing economic environment,” stated Brian Moynihan, CEO and chairman of Bank of America, in an announcement.
Source: www.bostonherald.com”