Bank of America, JPMorgan quarterly profit shrink

Shafaq News / Bank of America (BAC.N) on Friday reported its quarterly profit shrank, hit by $3.7 billion in one-off charges that compounded the pain from earning less on interest payments and paying more to customers to hold their deposits.

The bank's finance chief, however, expressed optimism about the U.S. economic outlook, citing resiliency among consumers.

"We feel pretty good about the economy," Chief Financial Officer Alastair Borthwick said on a call with reporters.

"The consumers still have plenty of firepower" in a strong labor market, he said.

Shares of the second-largest U.S. lender were down 1.8% in early trading on Friday after it posted net income of $3.1 billion, or 35 cents a share, for the three months ended Dec. 31. That compares with $7.1 billion, or 85 cents a share, a year earlier.

Excluding two charges related to replenishing a fund for bank failures and how it indexed some trades, the bank reported a profit of 70 cents, slightly above LSEG estimates of 68 cents.

"Bank of America reported modest Q4 results as the impact of interest rate headwinds was only partially offset by strong organic growth and good expense discipline," said David Fanger, senior vice president at Moody's Investors Service.

Other analysts said Bank of America's net interest income underperformed that of rival JPMorgan (JPM.N), which posted a 19% rise to a record $24.2 billion.

"This wasn't a great quarter especially relative to peers - JPMorgan really set the stage on net interest income," said David Wagner, portfolio manager at Aptus Capital Advisors.

(Reuters)