(Reuters) – Bank of America Corp posted a drop in fourth-quarter profit on Tuesday as historically low interest rates hurt its consumer banking business.
Net income applicable to common shareholders fell to $5.21 billion, or 59 cents per share, for the quarter ended Dec. 31 from $6.75 billion, or 74 cents per share, a year earlier.
Analysts on average had expected a profit of 55 cents per share, according to the IBES estimate from Refinitiv.
The second-largest U.S. bank by assets, seen as an economic bellwether, reported a 13% fall in consumer banking revenue to $8.2 billion, citing lower rates and a fall in credit card activity
Net interest income at big U.S. banks has come under pressure as the Federal Reserve cut interest rates to near zero to counter any signs of liquidity crunch during the pandemic.
Bank of America relies on higher interest rates to drive its profit growth as it has a large pool of deposits and rate-sensitive mortgage securities.
Separately, the second-largest U.S. bank said its board approved a $3.2 billion share repurchase program in the first quarter after getting a green light from regulators to resume buybacks last month.
(Reporting by Noor Zainab Hussain in Bengaluru and Imani Moise in New York; Editing by Anil D’Silva)
