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By Arasu Kannagi Basil and Saeed Azhar
(Reuters) -Bank of America's profit beat expectations on Thursday as its traders benefited from a flurry of activity in the fourth quarter while the lender predicted it would earn more interest income in 2025.
The earnings mirror those of rivals across Wall Street including JPMorgan, Goldman Sachs, Wells Fargo and Citigroup, whose results were buoyed by stronger equity markets and investment banking.
"Every source of revenue increased, and we saw better than industry growth in deposits and loans," CEO Brian Moynihan said. "This broad momentum sets up 2025 very well."
The second-largest U.S. lender's net income rose to $6.7 billion, or 82 cents per share. That compares with $3.1 billion, or 35 cents per share, a year earlier.
On an adjusted basis, BofA earned 82 cents per share in the fourth quarter, beating analysts' expectation of 77 cents per share, according to estimates compiled by LSEG.
The bank's shares rose 2.7% in premarket trading.
BofA's sales and trading revenue rose 10% to $4.1 billion, and the division notched records for the fourth quarter and full year. Fixed income revenue rose 13% because of improving performance in macro products and continued strength in credit while equities revenue climbed 6%, fueled by more client activity.
Equity markets rallied in the fourth quarter following the U.S. elections as investors bet on a more business-friendly environment under President-elect Donald Trump.
The S&P 500 stock index had a banner year, closing 23.3% higher in 2024 after racking up 57 all-time closing highs.
BofA's wealth and investment management division also benefited from surging equities, attracting more client money. Its revenue climbed 15% to $6 billion, while client balances jumped 12% to a record $4.3 trillion.
Meanwhile, Wall Street profits rebounded last year as mergers and acquisitions recovered from a decade-low in deal volumes in 2023.
Bankers anticipate a stronger 2025 for dealmaking, helped by Trump's vow to implement pro-business policies.
BofA's investment-banking fees jumped 44% to $1.7 billion in the fourth quarter, compared with a year earlier, but overall net income for its global banking unit fell as its expenses rose for personnel and technology.
Across the industry, global investment-banking revenue jumped 26% to $86.80 billion, led by a 33% surge in North America, according to Dealogic data. BofA earned the third-highest revenue among banks globally.
BofA's rivals also raked in higher fees from advising clients on deals and underwriting stock and debt offerings.