Major U.S. banks have withstood the recession caused by the coronavirus pandemic, but have not been immune to the low rates the crisis began.
A drop in interest income helped drag Bank of America Corp.’s profits, which fell 22% in the fourth quarter. The second-largest U.S. bank said Tuesday that its profits amounted to $ 5.477 billion in the last three months of the year, up from $ 6.991 billion the previous year.
Earnings per share of 59 cents exceeded analysts ’estimates of 55 cents. Still, the year-over-year drop in profits was the worst demonstration of all the big banks that reported their profits so far. Goldman Sachs Group Inc. it said on Tuesday that its fourth-quarter profits rose 135%.
Minimum interest rates have been a challenge for lenders, including Bank of America, who make money with the difference between what they pay depositors and what they earn with loans. Bank of America’s net interest income fell 16% year-over-year to $ 10.225 billion, although it rose slightly from the third quarter.
Deposits in the bank grew by about a quarter last year, with nervous consumers and companies looking for a safe place to keep their money. But the economic consequences of the coronavirus crisis have undermined customer loan demand. The bank’s outstanding loan and lease book, which had initially grown at the start of the pandemic, fell to $ 927.86 million at the end of the year, the smallest in more than three years.