Bank of America records better-than-expected fourth-quarter earnings; higher interest rates drive revenue up

On Friday, Bank of America reported its fourth-quarter earnings showing better-than-expected results as higher interest rates helped the giant to balance out the sharp slowdown in investment banking. As per reports, expectations were high that the Wall Street giant would record an increase in interest income owing to the higher rates and loan spike in the fourth quarter. Bank of America reported $14.7 billion of net interest income which is a hike of 29% year over year.

However, according to StreetAccount, Wall Street expected net interest of $14.8 billion from Bank of America. But, the gain helped offset a decline in fees of investment banking that dropped over 50% to $1.1 billion. It was also in line with the Wall Street expectations.

Unconventional economic indicators that might surprise you

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Japanese haircut indicator

This indicator simply states that when the economy is doing well, women are more likely to spend on their grooming habits. On the contrary, women are also likely to cut their hair shorter when there is a slump in the economy, as it requires less maintenance. This was studied over the course of 20+ years and was noticed especially in Japan.

Men's underwear indicator

According to the Men's underwear indicator index, there is a decline in men's underwear sales if the economy is suffering a slump and there is an upswing in sales when the economy improves. With this index, one might be able to detect the relative health of the economy.

Lipstick indicator

The Lipstick indicator was a term coined by Leonard Lauder in 2001 recession, the then chairman of Estee Lauder Cos. During the autumn of that year, he noted that lipstick sales had risen. This indicated that women who were faced with an uncertain economic environment would often turn to beauty products as affordable treats. This has been making a resurgence even today, as many are now chasing the 'clean girl' aesthetic which requires a significant number of products.

First Date indicator

This indicator essentially focuses on the number of people who attempt to get into relationships to overcome depression over a slump in the economy. There is a significant increase in traffic on online dating sites, especially during a recession. This was studied in the US, during the 2008 recession, when the online dating service Match.com reported that it saw a huge surge in traffic. The highest ever in over seven years.

Garbage indicator

The garbage indicator simply refers to the fact that when people have more money, they buy more, and in the end, they throw more. According to economists, this indicator has an 82% accuracy rate when studying US economic growth.

Bank of America CEO Brian Moynihan was supposed to be one of the main beneficiaries of the Federal Reserve’s rate-boosting campaign. In a statement, Moynihan said that the themes in the quarter have been consistent the entire year as organic growth and rates contributed to delivering the value of the bank's deposit franchise. “That coupled with expense management helped drive operating leverage for the sixth consecutive quarter,” he continued.

FAQs:

What is Bank of America?
The Bank of America Corporation is an American multinational investment bank and financial services holding company.
Which quarter’s results were posted by Bank of America?
Fourth

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Bank of America records better-than-expected fourth-quarter earnings; higher interest rates drive revenue up

Bank of America reported $14.7 billion of net interest income which is a hike of 29% year over year.