Dive Brief:

• Profit at Bank of America jumped 28% in 2021’s fourth quarter, to $7.0 billion from $5.5 billion a year earlier, the bank reported Wednesday.
• The bank’s performance, though, looks more impressive if taken over the full year. The Charlotte, North Carolina-based lender earned just under $32 billion in 2021, a 78.8% increase over the $17.9 billion it took in throughout 2020.
• Some of the bank’s steepest gains came not on the retail side for which Bank of America is best known but in its investment bank. Investment banking fees increased 26% in the fourth quarter, year over year, to $2.4 billion. Drilling further, advisory fees saw a 55% uptick over 2020’s fourth quarter, to $850 million.

Dive Insight:

Investment banking isn’t the only silo in which Bank of America saw double-digit percentage-point gains. Client balances in wealth management jumped 14% to a record $3.2 trillion. Assets under management, meanwhile, increased 17% to $1.3 trillion.

Like many of its rivals, Bank of America saw a significant swell — 10% — in compensation expenses year over year, to $36.1 billion. CEO Brian Moynihan warned last month the bank’s expenses would increase by hundreds of millions of dollars in 2021’s last three months. 

Its overall expenses saw a 6% boost — a fraction of the 18% jump in that line item at Citi over the fourth quarter, or the 11% uptick at JPMorgan Chase. Each of those banks this week raised base pay for junior investment bankers.

Bank of America CFO Alastair Borthwick on Wednesday bemoaned “stubborn COVID costs,” referring to expenses tied to keeping branches open, adding that those costs are expected to abate over 2022. That represents a hint that if the bank isn’t planning branch closures in the wake of the pandemic, it at least will emphasize its digital improvements.

Customer interactions through Erica, the bank’s digital assistant, tripled — to 104.6 million — between the third quarter of 2020 to last year’s comparable three-month span. 

Bank of America saw dips where its rivals did, too. The bank reported sales and trading revenue of $2.9 billion, a 2% decrease year over year. Fixed-income, currencies and commodities trading revenue dropped 9.9%.

Revenue overall at the bank jumped 10% in the fourth quarter, to $22.1 billion, over 2020’s comparable three-month period.

Net interest income — revenue the bank sees from customer loans minus the cut depositors get — increased 11%, to $11.41 billion, year over year.

Noninterest income saw an 8% uptick, to $10.65 billion, year over year. That figure could well drop throughout 2022, as Bank of America takes in less from overdraft fees. The bank last week said it would cut the penalty it charges consumers who overdraw their accounts from $35 per transaction to $10. Overdraft fees accounted for about 1.3% of the bank’s revenue in 2020.

Bank of America, between October and December, released $851 million of the loan-loss provisions it set aside during the pandemic’s early days, it said Wednesday.