Bank of America profit slips as Fed slashes interest rates
Short-term rates were lowered three times in 2019, to a range of 1.5% to 1.75%.
Bank of America's profit dropped 3.9 percent in the last three months of 2019 as interest-rate cuts by the Federal Reserve rendered new loans less lucrative, posing a challenge to lenders from Wall Street to Main Street. Shares of the lender were little changed following the results.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BAC | BANK OF AMERICA CORP. | 46.41 | -0.31 | -0.66% |
Earnings of 74 cents a share still topped the 68-cent average estimate from analysts surveyed by Refinitiv, as healthy consumer spending eased the impact of declining interest revenue, the Charlotte, N.C.-based company said in a statement. Net income in the fourth quarter was $6.99 billion.
CITIGROUP PROFITS RISE HELPED BY TRADING LIKE JPMORGAN
"The company managed well through a period of transition from rising rates to lower rates over a short period of time," Chief Financial Officer Paul Donofrio said in a statement. "We are also aided by diverse lines of business and operations."
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Earnings in consumer banking, the company's biggest business, tumbled 10 percent to $3.1 billion, largely due to lower interest income. Combined credit and debit-card spending increased 6 percent, with record purchases during the lucrative holiday shopping season.