Bank of America, Wells Fargo report profit surge as trading activity powers results
Banking giants Bank of America (BAC) and Wells Fargo (WFC) both reported Wednesday morning that their fourth quarter and full-year profits rose from a year ago.
For the quarter, Bank of America's net income came in at $7.6 billion, a 12% rise from a year ago and ahead of forecasts for $7.4 billion. Wells Fargo's net income rose 6% to $5.4 billion, in-line with forecasts.
Both banking giants reported their highest full-year net income in four years.
Bank of America's earnings per share came in at $0.98, ahead of forecasts, while Wells Fargo reported earnings per share of $1.62 was shy of forecasts for $1.67. Wells Fargo's results included a $0.14 impact related to severance costs in the quarter.
Bank of America stock rose about 1% ahead of Wednesday's open; Wells Fargo shares fell about 1%.
Revenue at both firms was driven by higher lending revenues and fees from the year-ago quarter. Bank of America's firm-wide revenue rose 7% to $28 billion while Wells Fargo posted a 4% increase in revenue to $21.3 billion.
Bank of America’s fourth quarter dealmaking revenue rose 1% from the year-ago quarter to $1.67 billion, while trading fees within the firm’s sales and trading business rose 10% to $4.5 billion, driven by equities.
Over the same period, Wells Fargo’s investment banking revenue fell 1%. Its markets division, which houses trading operations, reported an 8% increase to $1.6 billion in trading fees over the fourth quarter.
The CEOs of the nation's second- and fourth-largest banks, respectively, both shared optimistic views on the path ahead for the US economy and their own institutions. Last fall both banking giants set new growth and return targets.
"While any number of risks continue, we are bullish on the U.S. economy in 2026," Bank of America CEO Brian Moynihan said in a statement.
With the loosening of an onerous growth restriction last summer, Wells Fargo CEO Charles Scharf said, "we are excited to now compete on a level playing field and are able to dedicate even more resources to growth with the ability to grow our balance sheet."
For both banks the growth calls for higher efficiency at using resources to generate revenue.
Wells Fargo reported a severance charge of $612 million during the quarter. The bank periodically has slimmed down its workforce for the past several quarters. It had 205,000 employees, as of the end of December, a 6% decrease from the end of 2024.
David Hollerith covers the financial sector, ranging from the country's biggest banks to regional lenders, private equity firms, and the cryptocurrency space.
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