Bank of America has today reported higher profit as its investment bankers capitalised on resurgence in dealmaking in the fourth quarter while the lender predicted it would earn more interest income in 2025.
The earnings mirror those of rivals across Wall Street including JPMorgan, Goldman Sachs, Wells Fargo and Citigroup, whose results were buoyed by a dealmaking rebound and stronger equity markets.
"Every source of revenue increased, and we saw better than industry growth in deposits and loans," CEO Brian Moynihan said. "This broad momentum sets up 2025 very well."
Shares rose 2.7% in premarket trading.
Wall Street profits rebounded last year as mergers and acquisitions recovered from a decade-low in deal volumes in 2023. Capital markets also roared back as improving confidence spurred companies to issue equity and debt.
Bankers anticipate a stronger 2025 for dealmaking, helped by President-elect Donald Trump's vow to implement pro-business policies.
Bank of America's investment banking fees jumped 44% to $1.7 billion in the fourth quarter, compared with a year earlier.
Across the industry, global investment banking revenue jumped 26% to $86.80 billion, led by a 33% surge in North America, according to data from Dealogic. Bank of America earned the third-highest revenue among banks globally.
Meanwhile, equity markets rallied in the fourth quarter following the US presidential election as investors bet on a more business-friendly environment under President-elect Donald Trump.
The S&P 500 stock index had a banner year, closing 23.3% higher in 2024 after racking up 57 all-time closing highs.
Bank of America's sales and trading revenue rose 10% in the quarter, the 11th consecutive quarter of year-on-year growth, as equities jumped 6% while fixed income, currencies and commodities rose 13%.
The second-largest US lender's net income rose to $6.7 billion, or 82 cents per share. That compares with $3.1 billion, or 35 cents per share, a year earlier.
Bank of America stock gained 30.5% in 2024, underperforming rivals JPMorgan, Wells Fargo and Citigroup as well as the KBW Bank Index.
