Financial institution of America noticed most of its companies develop earnings within the fourth quarter.
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Financial institution of America stated its earnings rose 28% final quarter from a 12 months earlier, however the financial institution confronted the identical wage inflation as its Wall Avenue counterparts.
The financial institution stated Wednesday that it earned a revenue of $7.01 billion, or 82 cents per share, within the fourth quarter. That’s up from a revenue of $5.47 billion, or 59 cents a share, in the identical interval a 12 months earlier. Analysts surveyed by FactSet have been anticipating the financial institution to submit a revenue of 77 cents a share.
The financial institution, primarily based in Charlotte, North Carolina, noticed most of its companies develop earnings within the quarter. However a lot of the expansion was in BofA’s funding banking division, which noticed earnings climb to $2.68 billion from $1.67 billion. Different banks with funding banking companies noticed a robust finish to the 12 months, as firms scrambled to shut offers or go public.
BofA additionally received a one-time enhance from a launch of $851 million in loan-loss reserves final quarter. These reserves are cash that banks put aside to cowl probably unhealthy loans in the course of the early a part of the pandemic, and most banks have been steadily releasing these funds.
In BofA’s client banking enterprise, its largest division by income and earnings, earnings rose to $3.12 billion from $2.59 billion a 12 months earlier. Shoppers spent extra on the financial institution’s credit score and debit playing cards whereas bills have been decrease.
The financial institution lately shook up the business by asserting that it deliberate to chop overdraft charges to $10 from $35 in addition to cease charging quite a lot of charges that always would affect the financial institution’s poorest prospects.
Like its opponents, BofA is dealing with a lot increased compensation bills. The financial institution spent $36.1 billion on wages and advantages final 12 months, up 10% from a 12 months earlier. BofA joined Goldman Sachs, JPMorgan Chase, and Citi in saying they have been anticipating to see increased wage prices as they compete for expertise.
Morgan Stanley, which additionally issued its outcomes on Wednesday, reported an 18% soar in annual compensation bills as properly.
For the complete 12 months, Financial institution of America posted a revenue of $30.56 billion, practically double the $16.5 billion it earned in 2020 when the pandemic hit the worldwide economic system.
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