The largest US banks have withstood the recession caused by the coronavirus pandemic, but have not been immune to the low rates introduced by the crisis.
A decline in interest income helped reduce earnings at Bank of America Corp., which fell 22 percent in the fourth quarter. The second-largest bank in the United States said Tuesday that its profit totaled $ 5.47 billion in the last three months of the year, compared to $ 6.99 billion a year earlier.
Earnings per share of 59 cents exceeded analysts’ estimates of 55 cents. However, the year-over-year decline was the worst performance of a large bank that has reported gains so far. Goldman Sachs Group Inc. it said on Tuesday that its fourth-quarter profit rose 135%.
Lower interest rates have been a challenge for lenders, including Bank of America, who make money from the difference between what they pay 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 it rose slightly from the third quarter.
Bank deposits have risen by about a quarter in the past year, with nervous consumers and companies looking for a safe place to hide their money. But the economic consequences of the coronavirus crisis have affected customer demand for loans. The number of banks with outstanding loans and leases, which initially rose at the beginning of the pandemic, fell to $ 927.86 billion at the end of the year, the lowest in three years.