Bank of America on Friday announced solid annual earnings, due to higher interest rates and an increase in consumer lending, but its business grew less than expected.
Net profit in 2016 jumped 13% year-on-year to $ 16.2 billion, particularly marked by a take-off of 46.8% to 4.34 billion in the fourth quarter.
This performance resulted in adjusted earnings per share, a benchmark in North America of $ 1.50 over the year and 40 cents over the last three months, compared with $ 1.47 and 38 cents respectively.
Bank of America revenues rose very slightly
Revenues, on the other hand, rose very slightly by 0.89% to $ 83.70 billion over the year and by 2.1% to $ 20 billion in the fourth quarter. Investors anticipated $ 84.98 billion and $ 20.85 billion, respectively, due to runaway financial markets after Donald Trump's victory in the November 8 presidential election.
On Wall Street, Bank of America, which had gained 35% since then, declined from 0.17% to 22.88 dollars at around 7.25 am in the electronic exchanges prior to the opening of the session, reflecting somewhat Disappointment of investors.
While revenues from consumer loans increased as expected after the institution had passed on the interest rate hikes carried out in December by the central bank (Fed), revenues from market activities were not as strong Expectations.
Sales of brokerage increased by only 11% in the fourth quarter, while CEO Brian Moynihan said recently that the increase should turn to around 15%.
In detail, revenues from brokerage of "fixed revenues" (bonds, commodities, currencies) rose by only 12% and financial securities by only 7%.
Positive signals for 2017
The bank nevertheless sent positive signals for 2017, while the Trump government is preparing to take over the reins of power on 20 January.
"If the recent rate hike occurred too late to boost fourth-quarter results, we expect higher earnings growth in the first quarter of 2017," said CFO Paul Donofrio, quoted in the press release.
The Fed has suggested that it could proceed with three interest rate increases this year, while the Trump administration promises deregulation of the financial sector, massive rate cuts and large infrastructure investments. All these factors are likely to boost the profits of banks, experts say.
