Bank of America’s (BoA) profit fell four per cent in today’s fourth quarter results, with the firm announcing $7bn (£5.4bn) in net income, down from $7.3bn in the same quarter last year.
The small decline is due to lower interest rates squeezing the US lender’s ability to earn more from its loans.
Bank of America is the most vulnerable of the large US banks to fluctuating interest rates due to its large deposit stock and rate-sensitive mortgage securities.
Net revenue also saw a one per cent drop, falling to $22.3bn in the quarter.
However, the banking giant still exceeded analysts’ expectations, with earnings per share of 75 cents, considerably ahead of forecasts of 68 cents.
Bond trading was a particularly bright spot for BoA, with revenues rising 25 per cent. However, this was dwarved by increases at rivals JPMorgan and Citigroup, which grew 86 and 49 per cent respectively.
BoA did come out ahead of other banks in loans and deposits, with increases of 6 and 5 per cent respectively.
Revenue in the bank’s consumer division, its biggest business, fell five per cent to $9.5bn, largely as a result of the US Federal Reserve cutting interest rates three times last year.
Chief executive Brian Moynihan said in a statement: “In a steadily growing economy marked by solid client activity, our teammates produced another strong quarter and year, allowing us to increase investments in our customers, communities, and employees, while keeping a close eye on expenses.
“We also delivered for shareholders in 2019 by returning a record $34 billion in excess capital through dividends and share repurchases.”
BoA’s results follow those of JPMorgan, Citigroup, and Wells Fargo, which were announced yesterday. The former two institutions beat expectations, but Wells Fargo saw a 55 per cent slump in profit in the quarter.