Bank of America CEO Brian Moynihan on Friday said there is “palpable” optimism at the Charlotte-based company ahead of the incoming administration of President-elect Donald Trump.
“The optimism for positive change here at Bank of America and among our customers is palpable,” Moynihan told analysts during a conference call to discuss the bank’s latest quarterly financial results. Moynihan noted various changes expected under Trump, such as corporate tax overhauls and regulatory changes, adding: “We’ll have to see how these topics play out, but we’re optimistic.”
The comments came as Bank of America reported $4.7 billion in fourth-quarter profits, an increase of 43 percent from the same quarter last year as the company continued to slash expenses.
Bank of America also reported annual profits for 2016 of $17.9 billion, the most since $21 billion in 2006 before the financial crisis.
Friday’s results mark the 11th consecutive quarter of profitability for Bank of America, which is starting to recover from years of expensive legal settlements that resulted from the crisis.
Moynihan, who steered the bank through those legal issues after taking over as chief executive in 2010, has focused on trimming costs at the bank while streamlining a company that grew unwieldy after decades of acquisitions.
Those cost-cutting efforts have meant job losses in Charlotte and elsewhere under Moynihan’s watch. In the fourth quarter, the bank said it shed 985 positions, leaving it with 208,024 total employees. That adds to tens of thousands of positions the bank has eliminated since Moynihan took over and puts the company’s employee count only about 2,000 higher than July 2008 before it made big acquisitions of Countrywide Financial and Merrill Lynch.
Despite success in cutting billions in expenses, Moynihan remains under pressure to improve the bank’s performance on profitability measures watched by investors.
“We continue to focus on streamlining how we deliver our products and services to customers,” Paul Donofrio, chief financial officer, said on a conference call Friday with reporters.
Bank of America, which kicked off earnings season for the largest U.S. financial firms, said it earned 40 cents a share, compared 27 cents a year earlier. Friday’s results beat the 38-cent average estimate of 29 analysts surveyed by Bloomberg.
Revenue grew 2 percent while the bank cut expenses by more than 6 percent as it closed more branches and took other steps.
The bank’s focus on expenses has also come as the industry copes with interest rates that have remained low since the Federal Reserve slashed a key rate to help stimulate the economy during the last recession. Last month, the Fed raised rates for only the second time since the recession.
Bank of America also announced Friday plans to increase its planned common stock repurchases for the first half of 2017 to $4.3 billion, up from $2.5 billion.
A year ago, the second-largest U.S. bank by assets reported $3.34 billion in net income, an increase of 9 percent from a year earlier. In that period, the bank’s profitability was weighed down by an increase in money set aside for losses on various types of loans, including to the energy industry, as that sector was rocked by low oil prices.
Friday amounted to a hectic day for big-bank earnings, with New York-based JPMorgan Chase and San Francisco-based Wells Fargo also reporting. The unusual flurry of reports came as banks worked to get their results out before Monday’s holiday and the start of the World Economic Forum in Switzerland on Tuesday.
Wells Fargo, which is reeling from a sales scandal, said profits fell about 5 percent to $5.3 billion. JPMorgan said fourth-quarter profit rose 24 percent to $6.73 billion.
The next batch of results comes next week, when Morgan Stanley releases figures Tuesday followed by Citigroup, Goldman Sachs and U.S. Bancorp on Wednesday.
In late-morning trading, Bank of America shares were up about 1 percent to $23.14 on a positive day for bank stocks.