Bank of America Sees 28% Y/Y Rise in Net Income in Q4 2021

Bank of America, one of the world's leading financial institutions, has posted its financial results for the fourth quarter of 2021.

Net income rose 28% to $7.0 billion, or $0.82 per diluted share, reflecting strong operating leverage as revenues grew faster than expenses. Revenue, net of interest expense, increased 10% to $22.1 billion. 

Provision for credit losses improved by $542 million to a benefit of $489 million, driven by asset quality and macroeconomic improvements, partially offset by loan growth; net reserve release of $851 million. Average loan and lease balances up $10 billion to $945 billion; ending balances up $51 billion to $979 billion, led by strong commercial loan growth as well as higher card balances. Average deposits up $280 billion, or 16%, to $2.0 trillion.

Consumer Banking

• Net income of $3.1 billion

• Deposit balances up 16% to more than $1.0 trillion

• Consumer investment assets up $63 billion, or 20%, to a record $369 billion, driven by market valuations and inflows from new and existing clients; $23 billion of client flows since Q4-20

Global Wealth and Investment Management

• Net income of $1.2 billion

• Record client balances of $3.8 trillion, up $491 billion, or 15%, driven by higher market valuations and $149 billion in client flows in 2021

• Deposits up 18% to $361 billion

• Pretax margin of 30%

Global Banking

• Net income of $2.7 billion

• Record total investment banking fees (excl. self-led) of $2.4 billion, up 26%; record advisory fees of $850 million, up 55%

• No. 3 in investment banking fees with 6.6% market share, up 50bps3

• Deposits up 18% to $562 billion

Global Markets

• Net income of $669 million

• Sales and trading revenue down 2% to $2.9 billion, including net debit valuation adjustment (DVA) gains of $2 million; Fixed Income

Currencies and Commodities (FICC) revenue of $1.6 billion and Equities revenue of $1.4 billion

• Excluding net DVA,(G) sales and trading revenue down 4% to $2.9 billion; FICC down 10% to $1.6 billion; Equities up 3% to $1.4 billion

From Chief Financial Officer Alastair Borthwick:

"We ended the year on a strong note. Revenue rose faster than expenses, producing our second straight quarter of year-over-year positive operating leverage. Also, we significantly grew loans and deposits, which allowed us to increase net interest income by $1.2 billion versus the year-ago quarter despite a challenging rate environment. In addition, our investment banking and wealth management businesses continued to benefit from robust markets and the strong relationships we have built with our clients over many years.

"Asset quality remained strong with loss rates at historically low levels as the global economy continued to improve. This enabled us to release loan loss reserves again this quarter. For our shareholders, we increased book value per share by 6% to $30.37 and returned nearly $32 billion in 2021 through common stock repurchases and dividends."