Bank of America slips on Q4 revenue miss; Analysts see ‘some NII headwinds’ By Investing.com

Financial institution of America (BAC) reported fourth-quarter income figures that trailed analyst estimates, inflicting shares to fall 2.4% within the premarket.

Earnings per share of 70 cents got here in higher than the analyst estimate of $0.60. Nonetheless, the banking big reported income for the quarter of $23.5 billion, lacking the consensus estimate of $23.91 billion.

Buying and selling income, excluding DVA, was $3.75 billion, slightly below the consensus estimate of $3.84 billion.

The web curiosity earnings (NII) FTE reached $14.09 billion, according to the consensus. The web curiosity yield was 1.97%, which was decrease than the estimated 2.04%.

“We reported strong fourth quarter and full-year outcomes as all our companies achieved robust natural progress, with document shopper exercise and digital engagement. This exercise led to good mortgage demand and progress in deposits within the quarter and full-year web earnings of $26.5 billion,” mentioned Chair and CEO Brian Moynihan.

“Our expense self-discipline allowed us to proceed investing in progress initiatives. Sturdy capital and liquidity ranges place us nicely to proceed to ship accountable progress in 2024.”

Compensation bills amounted to $9.46 billion, exceeding the estimate of $9.17 billion.

Evercore ISI analysts famous that the corporate “might see some NII headwinds.”

“Principally the identical story and affordable sufficient quarter & execution in a not really easy backdrop… we expect BAC is in principally good condition coming into 2024,” they wrote in a word.

“That mentioned, whereas BofA didn’t present any ahead ideas on NII (100bps shift down past the curve estimated to lower NII by $3.1bn), we expect a falling web curiosity yield (down 17bps q/q and 34bps y/y) and solely modest deposit progress will result in decrease NII estimates vs what’s at present modeled and doubtless be a short-term headwind for the inventory if we’re on level.”