BANK OF AMERICA CORP DE
For the period ended Dec 31, 2023. Filed Feb 20, 2024.
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FY2023 · Filed Feb 20, 2024
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Global Banking
| (Dollars in millions) | 2023 | 2022 | % Change |
|---|---|---|---|
| Net interest income | $14,645 | $12,184 | 20% |
| Noninterest income: | |||
| Service charges | 2,952 | 3,293 | (10) |
| Investment banking fees | 2,819 | 3,004 | (6) |
| All other income | 4,380 | 3,748 | 17 |
| Total noninterest income | 10,151 | 10,045 | 1 |
| Total revenue, net of interest expense | 24,796 | 22,229 | 12 |
| Provision for credit losses | (586) | 641 | n/m |
| Noninterest expense | 11,344 | 10,966 | 3 |
| Income before income taxes | 14,038 | 10,622 | 32 |
| Income tax expense | 3,790 | 2,815 | 35 |
| Net income | $10,248 | $7,807 | 31 |
| Effective tax rate | 27.0% | 26.5% | |
| Net interest yield | 2.73 | 2.26 | |
| Return on average allocated capital | 21 | 18 | |
| Efficiency ratio | 45.75 | 49.34 | |
| Balance Sheet | |||
| Average | |||
| Total loans and leases | $378,762 | $375,271 | 1% |
| Total earning assets | 535,500 | 539,032 | (1) |
| Total assets | 602,579 | 603,273 | — |
| Total deposits | 505,627 | 511,804 | (1) |
| Allocated capital | 49,250 | 44,500 | 11 |
| Year end | |||
| Total loans and leases | $373,891 | $379,107 | (1)% |
| Total earning assets | 552,453 | 522,539 | 6 |
| Total assets | 621,751 | 588,466 | 6 |
| Total deposits | 527,060 | 498,661 | 6 |
Global Banking, which includes Global Corporate Banking, Global Commercial Banking, Business Banking and Global Investment Banking, provides a wide range of lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services through our network of offices and client relationship teams. Our lending products and services include commercial loans, leases, commitment facilities, trade finance, commercial real estate lending and asset-based lending. Our treasury solutions business includes treasury management, foreign exchange, short-term investing options and merchant services. We also provide investment banking services to our clients such as debt and equity underwriting and distribution, and merger-related and other advisory services. Underwriting debt and equity issuances, fixed-income and equity research, and certain market-based activities are executed through our global broker-dealer affiliates, which are our primary dealers in several countries. Within Global Banking, Global Corporate Banking clients generally include large global corporations, financial institutions and leasing clients. Global Commercial Banking clients generally include middle-market companies, commercial real estate firms and not-for-profit companies. Business Banking clients include mid-sized U.S.-based businesses requiring customized and integrated financial advice and solutions.
Net income for Global Banking increased $2.4 billion to $10.2 billion driven by higher revenue and lower provision for credit losses, partially offset by higher noninterest expense.
Net interest income increased $2.5 billion to $14.6 billion primarily due to the benefit of higher interest rates.
Noninterest income increased $106 million to $10.2 billion driven by negative valuation adjustments on leveraged loans in the prior year and higher revenue from tax-advantaged investment activities in the current year, partially offset by lower treasury service charges and lower investment banking fees.
The provision for credit losses improved $1.2 billion to a benefit of $586 million primarily due to an improved macroeconomic outlook.
Noninterest expense increased $378 million to $11.3 billion primarily due to continued investments in the business, including technology and strategic hiring in 2022, and higher FDIC expense, partially offset by expenses recognized for certain regulatory matters in the prior-year period.
The return on average allocated capital was 21 percent, up from 18 percent, due to higher net income, partially offset by higher allocated capital.
Global Corporate, Global Commercial and Business Banking
Global Corporate, Global Commercial and Business Banking each include Business Lending and Global Transaction Services activities. Business Lending includes various lending-related products and services, and related hedging activities, including commercial loans, leases, commitment facilities, trade finance, real estate lending and asset-based lending. Global Transaction Services includes deposits, treasury management, credit card, foreign exchange and short-term investment products.
39 Bank of America
The following table and discussion present a summary of the results, which exclude certain investment banking and other activities in Global Banking.
| Global Corporate, Global Commercial and Business Banking | ||||||||
|---|---|---|---|---|---|---|---|---|
| Global Corporate Banking | Global Commercial Banking | Business Banking | Total | |||||
| (Dollars in millions) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| Revenue | ||||||||
| Business Lending | $4,928 | $4,325 | $5,016 | $4,316 | $253 | $251 | $10,197 | $8,892 |
| Global Transaction Services | 5,746 | 5,002 | 4,139 | 4,166 | 1,531 | 1,213 | 11,416 | 10,381 |
| Total revenue, net of interest expense | $10,674 | $9,327 | $9,155 | $8,482 | $1,784 | $1,464 | $21,613 | $19,273 |
| Balance Sheet | ||||||||
| Average | ||||||||
| Total loans and leases | $171,554 | $174,052 | $194,725 | $187,597 | $12,285 | $12,743 | $378,564 | $374,392 |
| Total deposits | 272,964 | 250,648 | 181,905 | 204,893 | 50,759 | 56,263 | 505,628 | 511,804 |
| Year end | ||||||||
| Total loans and leases | $167,055 | $174,905 | $194,565 | $191,051 | $12,129 | $12,683 | $373,749 | $378,639 |
| Total deposits | 289,961 | 262,033 | 188,141 | 186,112 | 48,951 | 50,516 | 527,053 | 498,661 |
Business Lending revenue increased $1.3 billion in 2023 compared to 2022 primarily driven by higher interest rates, higher revenue from tax-advantaged investment activities and the impact of higher average loan balances.
Global Transaction Services revenue increased $1.0 billion in 2023 compared to 2022 primarily driven by higher interest rates, partially offset by lower treasury service charges and the impact of lower average deposit balances.
Average loans and leases increased one percent in 2023 compared to 2022 due to client demand. Average deposits decreased one percent in 2023 compared to 2022 due to declines in domestic balances.
Global Investment Banking
Client teams and product specialists underwrite and distribute debt, equity and loan products, and provide advisory services and tailored risk management solutions. The economics of certain investment banking and underwriting activities are shared primarily between Global Bankingand Global Markets under an internal revenue-sharing arrangement. Global Banking originates certain deal-related transactions with our corporate and commercial clients that are executed and distributed by Global Markets. To provide a complete discussion of our
consolidated investment banking fees, the table below presents total Corporation investment banking fees and the portion attributable to Global Banking.
| Investment Banking Fees | ||||
|---|---|---|---|---|
| Global Banking | Total Corporation | |||
| (Dollars in millions) | 2023 | 2022 | 2023 | 2022 |
| Products | ||||
| Advisory | $1,392 | $1,643 | $1,575 | $1,783 |
| Debt issuance | 1,073 | 1,099 | 2,403 | 2,523 |
| Equity issuance | 354 | 262 | 886 | 709 |
| Gross investment banking fees | 2,819 | 3,004 | 4,864 | 5,015 |
| Self-led deals | (43) | (78) | (156) | (192) |
| Total investment banking fees | $2,776 | $2,926 | $4,708 | $4,823 |
Total Corporation investment banking fees, which exclude self-led deals and are primarily included within Global Banking and Global Markets, decreased two percent to $4.7 billion primarily due to lower advisory and debt issuance fees, partially offset by higher equity issuance fees.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.