The bank's net interest income decreased by 5% to $13.9 billion due to higher deposit costs and lower deposit balances. Despite expectations that the bank would benefit from higher interest rates last year, it underperformed its peers due to its investment in low-yielding, long-dated securities during the Covid pandemic. Revenue from consumer banking fell by 4% to $10.3 billion, while sales and trading revenue rose by 3% to $3.6 billion.
Key takeaways:
- Bank of America shares fell about 2% in premarketing trading after reporting declining fourth-quarter earnings due to hefty one-time charges.
- The bank's net income fell to $3.1 billion in the fourth quarter, down more than 50% from $7.1 billion a year ago, largely due to a pretax charge of $1.6 billion related to the transition away from the London Interbank Offered Rate and a special $2.1 billion fee charged by Federal Deposit Insurance Corp.
- Bank of America's net interest income decreased 5% to $13.9 billion due to higher deposit costs and lower deposit balances, which more than offset higher asset yields.
- Bank of America stock is down more than 1% this year after a mere 1.7% gain in 2023, underperforming the S&P 500 financial sector which gained 10% last year.