Bank of America’s Profit Soars as Traders Reap Rewards
Strong Fourth Quarter Performance Sets Stage for 2025
Bank of America’s profit exceeded expectations in the fourth quarter, driven by a surge in trading activity and a robust performance in its investment banking division. The lender’s net income rose to $6.7 billion, or 82 cents per share, beating analysts’ estimates of 77 cents per share.
Broad Momentum Across Revenue Streams
CEO Brian Moynihan attributed the strong performance to growth across all revenue streams, including deposits and loans. “Every source of revenue increased, and we saw better than industry growth in deposits and loans,” Moynihan said. “This broad momentum sets up 2025 very well.”
Trading Revenue Hits Record High
The bank’s sales and trading revenue rose 10% to $4.1 billion, driven by improving performance in macro products and continued strength in credit. Equities revenue climbed 6%, fueled by increased client activity. The strong performance was mirrored by rivals JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup, whose results were buoyed by stronger equity markets and investment banking.
Wealth and Investment Management Division Thrives
Bank of America’s wealth and investment management division also benefited from surging equities, attracting more client money. Revenue climbed 15% to $6 billion, while client balances jumped 12% to a record $4.3 trillion.
Investment Banking Fees Surge
The bank’s investment-banking fees jumped 44% to $1.7 billion in the fourth quarter, compared with a year earlier. This was driven by a rebound in mergers and acquisitions, which recovered from a decade-low in deal volumes in 2023. Bankers anticipate a stronger 2025 for dealmaking, helped by President-elect Donald Trump’s vow to implement pro-business policies.
Net Interest Income to Continue Growing
Bank of America’s net interest income rose 3% to $14.4 billion in the quarter, driven mainly by market activity, fixed-rate asset repricing, and loan growth. The bank expects NII to continue growing in 2025, driven by a steeper yield curve, less pressure on deposit costs, and expectations for modest loan growth.
Outlook for 2025
CEO Brian Moynihan expects to see NII grow throughout 2025, driven by fixed-rate assets and securities portfolio repricing over time into higher-yielding assets. The bank’s shares rose 0.2% in early trading, and analysts expect NII to climb in the fourth quarter to a range of $15.5 billion to $15.7 billion.
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