Both banks increased their reserves as protection against deteriorating economic conditions, but signaled optimism about consumer resilience.
Bank of America and Wells Fargo reported better-than-expected profits on Friday for their latest quarter, helped by rising interest rates. But both banks also increased their reserves against future loan losses, citing what Bank of America described as a “dampened” economic outlook.
Bank of America ended what Brian Moynihan, the bank’s chief executive, called “one of the best years ever for the bank” with $7.1 billion in net income for its fourth quarter, up slightly from the previous year. The bank’s revenue was $24.5 billion, up 11 percent from a year earlier. Net interest income grew 29 percent to $14.7 billion.
The bank added $403 million to its cushion against credit losses, and its net charge-offs — bad debt written off by the bank — grew significantly compared with a year ago but remained below prepandemic levels.
