By Rachel Louise Ensign
Bank of America Corp. said Wednesday that fourth-quarter profit rose sharply from a year ago.
Quarterly profit at the Charlotte, N.C.-based bank, the second largest in the U.S. by assets, was $7.3 billion, compared with $2.4 billion a year ago. Per share, earnings were 70 cents. Analysts polled by Refinitiv had expected 63 cents per share.
Earnings benefitted from the corporate tax cut passed in late 2017. In the same quarter a year ago, Bank of America took a large one-time charge related to the tax overhaul.
The lender's bottom line was also lifted by rising interest rates. Bank of America has been able to charge higher rates on loans but has not paid out much more to depositors, boosting profits. In December, the Federal Reserve raised its benchmark rate for the fourth time in 2018.
Still, investors have turned gloomy on bank stocks. This is the last quarter where earnings growth will benefit from favorable comparisons to a period when corporate tax rates were higher. And the Federal Reserve has signaled a more cautious approach to future rate hikes.
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