Christopher Goodney | Bloomberg | Getty Images
Brian Moynihan, Bank of America
Net interest income rose 11 percent to $11.5 billion in the fourth quarter, helped by higher interest rates and loan and deposit growth. Net charge-offs rose to $1.2 billion, “primarily driven by a single-name non-U.S. commercial charge-off totaling $292 million,” according to a release.
“Client activity was strong across all of our businesses in 2017,” CFO Paul M. Donofrio said in the release. “Our balance sheet remains strong and we believe we are well positioned for growth.”
Analysts were watching for the impact of low volatility and the new tax legislation on the bank’s fourth quarter results.
The bank reported fixed income trading revenues fell 13 percent in the fourth quarter. Revenue from equities trading was unchanged.
Bank of America said in a Dec. 22 filing it expects a $3 billion hit to fourth quarter results as a result of the Tax Cuts and Jobs Act. And in early December, Moynihan said trading revenues were tracking for a 15 percent decline in the fourth quarter from the same period last year.
Last week, J.P. Morgan Chase reported a 34 percent drop in fixed income markets trading revenue in the fourth quarter. Earnings per share and revenue both beat expectations.
Wells Fargo on Friday reported an earnings beat, helped by the new tax law. But the bank’s quarterly revenue missed expectations.
Most banks have reported a fourth quarter-hit from the new tax legislation. J.P. Morgan announced a $2.4 billion charge. On Tuesday, Citigroup posted a one-time, noncash charge of about $22 billion for the fourth quarter due to the new tax law. Excluding that charge, the bank reported better-than-expected earnings per share, helped by growth in consumer banking.
President Donald Trump last month signed a bill cutting the corporate tax rate to 21 percent from 35 percent.
Goldman Sachs is also set to report quarterly results Wednesday morning, while Morgan Stanley is set to post results Thursday.
— Reuters contributed to this report.
