Bank of America FY2019 net income dips by 3% to $27.4bn but full year results are ahead of analyst forecasts.
The earnings highlight the strength of the bank’s consumer banking franchise.
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Bank of America Consumer Banking net income rises by 7.4% year-over-year to £13.0bn for the full fiscal.
Consumer banking average deposits rise by 4.8% y-o-y to $720m. Meantime, consumer loans are ahead by 7% y-o-y driven by growth in residential mortgages. Commercial loans are also ahead, up by 6% y-o-y.
On the other hand, consumer banking revenue dips by 4% driven primarily by lower net interest income.
Specifically, net interest income falls by 3% in the fourth quarter driven by lower interest rates.
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By GlobalDataOther less positive metrics include a 2 percentage point rise in the bank’s cost-income ratio to 60%. At the same time, provisions for credit losses rise by 4% in the final quarter. More positively, the bank’s net charge-off ratio improved to 1.18% from 1.22%.
Bank of America FY2019 digital highlights
The bank continues to post impressively strong digital metrics.
For example, active mobile banking users rise by more than 10% from 26.4 million to 29.2 million. Total active digital banking users are up by 6% to 38.3 million. Total users of Erica, the bank’s virtual voice assistant launched in April 2018, is up to 10.3 million.
Meantime users of the Zelle P2P payments service grow to 9.7 million.
The bank ends 2019 with consumer banking digital sales as a percentage of total sales of 29% up from 27%.
Bank of America FY2019 other highlights
The bank’s global wealth unit reports record total client balances of $3trn, up 16%. The unit’s loans are up by 7% with deposits ahead by 3%.
Wealth management active mobile users rise by 38%. The bank says that 78% of private bank clients are active users of the bank’s digital channels.
Bank of America’s share price dipped by 2% on release of its fourth quarter and full year results. But the share price is ahead by 30% over the past year.
