The Trump effect helped Bank of America Corp. (NYSE:BAC) to nearly double its fourth-quarter profits, reflecting the upswing in market activity in the wake of the US presidential election.
The US bank - the second biggest in the country by assets - said its net income rose by 46,8% to $4.34 billion in the three months ended December 31, up from $2.95 billion a year earlier.
BofA saw its earnings per share jump to 40 US cents, up from 27 US cents at the same stage in 2015, beating analysts forecasts.
It added that total sales and trading revenue increased by 11% in the fourth quarter, spurred by a surge in activity in stock and bond markets following Donald Trump's surprise victory on November 8.
Rates boost ...
BofA is the first big US bank to report earnings since the Federal Reserve raised interest rates for only the second time since 2006 on December 14.
In its quarterly statement, the lender’s chief financial officer, Paul Donofrio said: "While the recent rise in interest rates came too late to impact the results, we expect to see a significant increase in net interest income in the first quarter of 2017,"
The largest US bank, JPMorgan Chase & Co.(NYSE:JPM), and the country’s biggest mortgage lender, Wells Fargo & Co. (NYSE:WFC) will also report results later on Friday.
Shares in the banking sector have rallied strongly since Trump's victory in anticipation that his policies will boost the economy as well as loosen regulations that have restrained them in recent years.
Banks will also benefit if, as expected, the Fed raises interest rates three times this year.