(Reuters) – Bank of America Corp (NYSE:) beat analysts’ estimates for quarterly profit on Wednesday, as a boost from bond trading and growth in its loan book helped the second-biggest U.S. lender blunt a hit from lower interest rates.
Bond trading has been a bright spot for big U.S. banks that reported fourth-quarter results this week, largely due to easy comparisons from a year earlier when financial markets were selling off due to concerns over trade and global growth.
Bank of America reported a 25% rise in bond trading revenue, although that was far short of the 86% surge at JPMorgan Chase (NYSE:) and Co and a 49% jump at Citigroup Inc (NYSE:).
Loans grew 6% at Bank of America, significantly outpacing increases at Citigroup and JPMorgan. Bank’s deposits rose 5%.
“Solid client activity in growing loans and gathering deposits helped us offset spread compression,” Chief Financial Officer Paul Donofrio said in a statement.
However, revenue in consumer banking, the bank’s biggest business, fell 5% to $9.5 billion, largely due to the three interest rate cuts last year by the Federal Reserve.
The bank’s net interest margin, which measures how profitably a bank can lend out depositors’ funds, fell to 2.35% from 2.52% a year earlier, and from 2.41% in the prior quarter.
Bank of America is the most vulnerable among the big U.S. banks to fluctuations in interest rates because of its large deposit stock and rate-sensitive mortgage securities.
Net income applicable to common shareholders fell to $6.75 billion in the fourth quarter ended Dec. 31, from $7.04 billion a year earlier.
Excluding items, the bank reported a profit of 75 cents per share, beating analysts’ estimate of 68 cents.
Revenue, net of interest expense, fell slightly to $22.35 billion.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.