Bank of America earnings weighted by low interest rates

America’s largest banks weathered the recession triggered by the coronavirus pandemic, but they were not immune to the low rates the crisis engendered.

Lower interest income helped push down profits at Bank of America Corp., which fell 22% in the fourth quarter. America’s second-largest bank said on Tuesday that its profit stood at $ 5.47 billion in the last three months of the year, up from $ 6.99 billion a year earlier.

Earnings per share of 59 cents exceeded analysts’ estimates of 55 cents. Yet the year-over-year decline in profits was the worst result of any major bank to report profits so far. Goldman Sachs Group Inc. announced on Tuesday that its fourth quarter profit jumped 135%.

Lower interest rates have been a challenge for lenders, including Bank of America, who make money on the difference between what they pay depositors and what they earn by lending. Bank of America’s net interest income fell 16% from a year earlier to $ 10.25 billion, although it was up slightly from the third quarter.

Bank deposits have increased by about a quarter over the past year, as consumers and businesses nervous about finding a safe place to store their money. But the economic fallout from the coronavirus crisis has undermined customer demand for loans. The bank’s outstanding loan and lease portfolio, which initially increased at the start of the pandemic, fell to $ 927.86 billion by year-end, its smallest in more than three years.