Bank of America reports near 50 percent profit growth

Bank of America Corp reported a near 50 percent jump in fourth quarter profit on Friday.
By Tobi Gerdes | Jan 13, 2017
Bank of America Corpreported a near 50 percent jump in fourth quarter profit on Friday.

The finance chief of Bank of America (BAC.N) added a prediction that as a result of rising interest rates, the company foresees sturdy income growth in future quarters. According to Bank of America, its earnings equaled $4.34 billion in the final quarter of the year through Dec. 31. This is in comparison to $2.95 billion in 2015. According to these reports, Bank of America shares grew by 13 cents per share between the two quarters (27 cents per share in 2015; 40 cents per share in 2016). Financial analysts estimated that Bank of America would earn 38 cents per share. The lender beat these estimations, earning 42 cents per share excluding items according to Thomson Reuters I/B/E/S.
The overall revenue of the bank increased only two percent, but its non interest expenses fell six percent. The reason for the growth, according to the Charlotte, North Carolina based lender, is due to higher trading revenue and cost cuts put in place last yearby Chief Executive, Brian Moynihan. The program aimed to cut $5 billion in Bank of America annual operating expenses by 2018. Bank of America Chief Financial Officer, Paul Donofrio, also cited the cost cuts as the reason for the growth. According to Donofrio, Bank of America will produce $600 million in net interest income during the current quarter as a result of rising interest rates. Financial analysts count Bank of America as the most sensitive American bank to shifts in interest rates.


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