Bank of America (BAC) posted fourth-quarter profit of $7 billion

Bank of America (BAC) beat analysts’ profit estimate on rebound in bond-trading revenue. The bank posted fourth-quarter profit of $7 billion, a 4% decline from a year earlier, or 74 cents a share, which was an unexpected 6% increase helped by a reduction in outstanding shares. That exceeded the 68 cent estimate of analysts surveyed by Refinitiv.

 

The revenue fell 1% to $22.5 billion, edging out the $22.35 billion estimate. Just as at J.P. Morgan and Citigroup, bond trading helped results, surging 25% to $1.8 billion at Bank of America, exceeding the $1.68 billion estimate.

 

Bank of America posted profit that exceeded analysts’ expectations on a rebound in trading revenue and as the company repurchased shares.

 

On Wednesday, BAC posted fourth-quarter profit of $7 billion, with a 4% decline from a year earlier, or 74 cents a share, which was an unexpected 6% increase helped by a reduction in outstanding shares. That figure exceeded the 68 cent estimate of analysts surveyed by Refinitiv. Company’s revenue fell 1% to $22.5 billion, edging out the $22.35 billion estimate.

The lower interest rates impact was felt widely at Bank of America (BAC), as impacting its core lending and banking operations. The Company wide net interest income decline 3% to $12.3 billion, and bank’s net interest margin slips 17 basis points to 2.35%, that is just under analysts’ 2.36% estimate.

 

The profit decline 10% to $3.1 billion, at the lender’s giant retail bank, on the impact of lower rates. Bank of America also cited interest rates as a reason for lower revenue in its global banking, and the wealth management divisions.

 

Being the second largest U.S. lender, after the J.P. Morgan Chase (JPM), Bank of America (BAC) is among the most sensitive of large banks when it comes to changes in interest rates, according to analysts. Hense, the investors will be keen to hear how rates are, which were trimmed three times last year by the Federal Reserve, also impacted the quarter, as well as guidance for 2020.