New York City, USA : Bank of America (BAC) reported fourth-quarter net income of $7.3 billion, up 208% from prior year, driven by continued strong operating leverage and asset quality, as well as the benefit of tax reform impacting 2018. Fourth-quarter net income was up 39% adjusting for the impact of the Tax Act in prior year. Pretax income was $8.7 billion rose 41% (22% on an adjusted basis) from previous year. Earnings per share was $0.70, up 250% (49% on an adjusted basis). On average, 25 analysts polled by Thomson Reuters expected the company to report profit per share of $0.63 for the quarter. Analysts’ estimates typically exclude special items.
Fourth-quarter revenue, net of interest expense, increased 11% (6% on an adjusted basis) to $22.7 billion, led by net interest income, reflecting benefits from higher interest rates as well as loan and deposit growth. Analysts expected revenue of $22.45 billion, for the quarter. Average deposit balances rose $51 billion, or 4%, to $1.3 trillion.
For Consumer Banking business segment, fourth-quarter net income rose 52% to $3.3 billion. Loans were up 5% to $290 billion. Deposits were up 3% to $687 billion. For Global Wealth and Investment Management segment, fourth-quarter net income rose 43% to $1.1 billion. Loans increased 4% to $164 billion.
“We significantly improved our returns in the fourth quarter, with a 1.24% return on average assets and a 16.3% return on average tangible common shareholders’ equity. Each line of business contributed to these results. With a strong balance sheet, we’re ready to deliver again in 2019,” said Paul Donofrio, CFO.
Rivals JPMorgan Chase & Co (JPM.N) and Citigroup Inc (C.N) reported double-digit declines in bond trading revenue, citing the market downturn in December and wider credit spreads.