(Yahoo! Finance) - Banking giants Bank of America (BAC) and Wells Fargo (WFC) both reported Wednesday morning that their fourth quarter and full-year profits rose from a year ago.
For the quarter, Bank of America's net income came in at $7.6 billion, a 12% rise from a year ago and ahead of forecasts for $7.4 billion. Wells Fargo's net income rose 6% to $5.4 billion, in-line with forecasts.
Both banking giants reported their highest full-year net income in four years.
Bank of America's earnings per share came in at $0.98, ahead of forecasts, while Wells Fargo reported earnings per share of $1.62 was shy of forecasts for $1.67. Wells Fargo's results included a $0.14 impact related to severance costs in the quarter.
Their banking peer, Citigroup (C), which reported later Wednesday morning, reported a 13% decline in profits from a year ago, with the bank's $2.5 billion in net income and earnings per share of $1.19, both missing analyst forecasts. During the quarter, Citi disclosed that it would record a $1.2 billion loss in the period to recognize the forthcoming sale of its Russia unit.
Bank of America shares fell about 1% ahead of Wednesday's open; Wells Fargo shares fell more than 2%. Citigroup's stock rose 1%.
Revenue growth at BofA and Wells was driven by higher lending margins and fees compared to the year-ago quarter. Bank of America's firm-wide revenue rose 7% to $28 billion while Wells Fargo posted a 4% increase in revenue to $21.3 billion.
Bank of America’s fourth quarter dealmaking revenue rose 1% from the year-ago quarter to $1.67 billion, while trading fees within the firm’s rose 10% to $4.5 billion, driven by equities.
At Citi, investment banking revenue climbed 35% to $1.29 billion, driven by a surge in its M&A advisory business. Its markets division, which houses trading operations, reported an 1% drop in trading fees over the fourth quarter compared to the year ago period.
Over the same period, Wells Fargo’s investment banking revenue fell 1% to $716 million. Its trading operations, reported an 8% increase to $1.6 billion in fees over the fourth quarter.
The CEOs of the nation's second, third and fourth-largest banks, respectively, shared optimistic views on the path ahead for the US economy and their own institutions. Last fall Bank of America and Wells Fargo set new growth and return targets. Citigroup set its own target on the same profitability measure, return on tangible common equity or ROTCE, in 2022 but lowered the range at the beginning of last year.
"While any number of risks continue, we are bullish on the U.S. economy in 2026," Bank of America CEO Brian Moynihan said in a statement.
With the loosening of an onerous growth restriction last summer, Wells Fargo CEO Charles Scharf said, "we are excited to now compete on a level playing field and are able to dedicate even more resources to growth with the ability to grow our balance sheet."
For both banks the growth calls for higher efficiency at using resources to generate revenue.
Wells Fargo reported a severance charge of $612 million during the quarter. The bank periodically has slimmed down its workforce for the past several quarters. It had 205,000 employees, as of the end of December, a 6% decrease from the end of 2024.
By David Hollerith - Senior Reporter
