The largest US banks withstood the recession of the coronavirus pandemic, but they were not immune to the low rates that instituted the crisis.
A drop in interest income helped boost earnings at Bank of America Corp. to fall, which fell by 22% in the fourth quarter. The second largest bank in the US said on Tuesday that its profit in the last three months of the year was $ 5.47 billion, compared to $ 6.99 billion a year earlier.
Earnings per share of 59 cents are higher than the analysis estimates of 55 cents. The decline in profit on an annual basis was nevertheless the worst performance of any major bank to report earnings so far. Goldman Sachs Group Inc. said Tuesday its fourth-quarter profit rose 135%.
Rock-bottom interest rates have been a challenge for borrowers, including Bank of America, who make money on the difference between what they pay to depositors and what they earn from loans. Bank of America’s net interest income fell 16% from a year earlier to $ 10.25 billion, although slightly higher than in the third quarter.
Deposits at the bank have grown by about a quarter over the past year, while nervous consumers and companies have been looking for a safe place to store their money. But the economic consequences of the coronavirus crisis have weakened customer demand for loans. The bank’s outstanding loans and leases, which initially grew at the start of the pandemic, shrank to $ 927.86 billion by year-end, the smallest in more than three years.