Bank of America’s net income hit a record high in fiscal 2021

Bank of America Corp (NYSE: BAC) popped up nearly 5.0% on Wednesday after the multinational said its profit topped expectations in Q4. But the stock then gave up almost the entire intraday gain on lower-than-expected revenue.

Important points in BofA Q2 report

Bank of America said its net income printed at $6.77 billion or 82 cents per share versus the year-ago figure of $5.21 billion or 59 cents per share. At $22.06 billion, total revenue jumped 9.8% YoY. According to FactSet, experts had forecast 77 cents of EPS on $22.18 billion in revenue.

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Net interest income climbed up 11.3% to beat estimates, thanks to solid growth in loans. Revenue from consumer banking, global wealth and investment management, and global banking was up 8.0%, 16%, and 24%, respectively.

Markets revenue slid 2.0% in the recent quarter primarily on a 10% decline in FICC while equities still rose 3.0%, as per the earnings press release. BofA’s net income jumped to a record $32 billion in fiscal 2021 as a whole.

Jim Cramer’s take on BofA’s earnings

Bank of America has been benefitting in recent months on talks of aggressive rate hikes in 2022. On CNBC’s “Squawk on the Street”, Jim Cramer said:

BofA has been adding expenses for a while, but now, suddenly, they’ve got the deposits, the Fed’s going to raise rates, and they don’t have to do anything, they just make more money. It’s kind of like 1982 when Greenspan said we’ll let the banks make more money.

On the flip side, however, the Wall Street banks have confirmed that wage inflation is hurting their financial performance. Also on Wednesday, Bank of America said its noninterest expenses are likely to keep flat this year versus JPMorgan, which expects an 8.0% increase in expenses.

Earlier this week, BofA launched CashPro Forecasting.