BofA investment bankers boost earnings; Morgan Stanley profit doubles
BofA Investment-banking fees jumped 43% to US$1.69 billion in Q4 while Morgan Stanley’s Q4 net income more than doubled
BANK of America posted fourth-quarter profit that topped analysts’ estimates as investment-banking fees hit the highest in three years and net interest income outperformed forecasts.
Investment-banking fees jumped 43 per cent to US$1.69 billion in the fourth quarter, according to a statement on Thursday (Jan 16). Net interest income (NII) also rose in the quarter, climbing 3 per cent to US$14.4 billion. That’s more than analysts were expecting for NII, the revenue collected from loan payments minus what depositors are paid.
“Every source of revenue increased, and we saw better than industry growth in deposits and loans,” chief executive officer Brian Moynihan said in the statement.
Bank of America’s results offer another look at how US consumers and businesses are faring as the Federal Reserve starts lowering borrowing costs for the first time in almost half a decade. Lenders’ balance sheets overall have remained resilient, though uncertainties remain with geopolitical tensions and changes under President-elect Donald Trump’s administration.
The second-largest US lender said that its deposits and loans both grew in the fourth quarter, topping estimates. Bank of America’s loans reached almost US$1.1 trillion, higher than the US$1.08 trillion estimate. Lending has been a key focus for investors, with lower interest rates expected to spur borrowing as it becomes less costly. Deposits also grew 2.2 per cent to almost US$1.97 trillion, beating analysts’ expectations for a 1.2 per cent increase.
Morgan Stanley’s traders beat analysts’ estimates in the fourth quarter, joining their other Wall Street rivals in reporting a strong end to the year on volatility tied to the US elections and economic data in the final months of 2024.
Equities was the big winner, with revenue jumping 51 per cent in the quarter and reaching an all-time high for the full year. In the wealth business, net new assets fell just shy of estimates even as revenue topped expectations.
“What we saw within the quarter was, post-election, a lot of activity associated with clients looking to re-risk,” chief financial officer Sharon Yeshaya said in an interview, citing an increase in prime-brokerage balances. “The largest part of the story was the re-risking within the equities business.”
Fourth-quarter net income more than doubled to US$3.72 billion. BLOOMBERG, REUTERS
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