Bank of America (NYSE:BAC) on Wednesday topped analysts’ estimates for profit on record asset management and investment banking fees and the release of $851 million in loan loss reserves.
Earnings came in at 82 cents a share vs. 76 cents a share estimated. Revenue were posted at $22.17 billion vs. $22.2 billion estimate.
The lender said that fourth-quarter profit rose 28% to $7.01 billion, or 82 cents a share, topping the 76-cent-a-share average estimate of analysts. Revenue rose 10% to $22.17 billion, just under the $22.2-billion estimate.
The second biggest U.S. bank by assets said that credit quality improved during the quarter, allowing it to release the $851 million in reserves and book a nearly half billion dollar benefit after $362 million in chargeoffs. The bank said it was the lowest loss rate for loans in more than five decades.
Bank of America, led by CEO Brian Moynihan, had enjoyed tailwinds in recent months as rising interest rates and a rebound in loan growth promised to boost the industry’s profitability. But that narrative went off course after banks began disclosing the impact of wage inflation on results.
Analysts are likely to ask management about the impact of the bank’s recent decision to eliminate some fees and reduce overdraft charges to $10 from $35.
BAC shares sprang up $1.16, or 2.5%, to $47.42.
