Bank of America Corp`s net profit nearly halved compared with a year earlier as it booked a $2.9 billion charge stemming from the new federal tax law although it beat analysts` estimates when adjusted for the charge.
The lender joined other large U.S banks, including JPMorgan Chase & Co and Citigroup Inc, in reporting multi-billion dollar charges because the new law requires them to reassess their deferred tax assets and pay tax on profits kept abroad.
Excluding the tax charge, Bank of America earned $5.3 billion, or 47 cents per share. According to Thomson Reuters I/B/E/S, excluding the tax charge and another item, the company earned 48 cents per share, topping analysts` estimate of 44 cents.
Revenue rose at three of the lender`s four businesses, pushing total revenue up about 2 percent to $20.69 billion.
Like its rivals, Bank of America`s trading revenue fell compared with a year earlier when investors actively changed positions around the U.S. presidential elections. At Bank of America, adjusted trading revenue fell 9 percent from this quarter last year.
Fourth-quarter results were also hit by a $292 million charge for single-name loss, which a source familiar with the situation said was related to troubled South African furniture retailer Steinhoff International.
The company`s woes have rippled through Wall Street with Citigroup and JPMorgan booking losses of $130 million and $143 million, respectively, and more pain is expected when the European banks start reporting results in the coming weeks.
Bank of America`s net interest income rose 11.4 percent to $11.46 billion as three rate hikes in 2017 helped it charge more on its loan.
The lender`s large stock of deposits and rate-sensitive mortgage securities make the lender particularly responsive to a rise in interest rates.
Non-interest expenses fell 1 percent to $13.27 billion as the lender kept a tight leash on costs.
Net income, which includes the tax charge, fell to $2.37 billion, or 20 cents per share, in the quarter ended Dec. 31 from $4.54 billion, or 39 cents per share, in the year earlier period.
Bank of America`s shares were up 0.4 percent at $31.35 in light premarket trading.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.