- ORIGINAL NEWS
Bank of America shares fall after company reports lower fourth-quarter profit, hit by regulatory charge
- SUMMARY
Bank of America faced challenges in the fourth quarter, resulting in a decline in net income and earnings per share.
The company’s profit fell by over 50% compared to the previous year.
This drop was partly due to a substantial non-operating expense related to the London Interbank Offered Rate transition and a special fee charged by the Federal Deposit Insurance Corp.
Despite these charges, the bank reported adjusted earnings per share that beat analysts’ expectations.
Bank of America’s net interest income saw a decrease due to rising deposit costs.
Additionally, the bank’s consumer banking revenue experienced a dip.
However, sales and trading revenue showed a slight increase.
Overall, Bank of America stock underperformed in 2023 compared to the broader financial sector.
Its shares are slightly down this year and had only a modest gain in 2023, in contrast to the S&P 500 financial sector, which gained 10% last year.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“CEO Brian Moynihan said in a statement. “Our expense discipline allowed us to continue investing in growth initiatives. Strong capital and liquidity levels position us well to continue to deliver responsible growth in 2024.””
“Revenue from consumer banking dipped 4% to $10.3 billion, while sales and trading revenue went up by 3% to $3.6 billion.”
Negative
“Bank of America shares fell on Friday after the firm reported declining fourth-quarter earnings amid hefty one-time charges.”
“The bank, based in Charlotte, North Carolina, said it was hit by a pretax charge of $1.6 billion in the quarter related to the transition away from the London Interbank Offered Rate.”