Bank of America's Q4 profit beats estimates

BANK of America Corp reported a better-than-expected fourth-quarter profit on Friday (Jan 13) as rate hikes helped it charge more interest on loans to customers.

The US Federal Reserve and other major central banks raised rates aggressively last year to tame decades-high inflation.

The ‘higher-for-longer’ rate environment has underpinned profits at consumer banks, with analysts expecting those gains to peak in 2023. This helped partially offset sluggish dealmaking and larger provisions for loan losses.

Bank of America’s revenue, net of interest expense, increased 11 per cent to US$24.5 billion in the fourth quarter.

The bank earned 85 cents per share in the quarter. Analysts, on average, had estimated a profit of 77 cents per share, according to Refinitiv IBES data.

Profit applicable to common shareholders rose 2 per cent to US$6.9 billion in the quarter, from US$6.77 billion a year earlier, the bank said in a statement. REUTERS