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Bank of America 4Q profits jump on higher interest rates

Ken Sweet, AP Business Writer

FILE- In this July 9, 2018, file photo a customer makes a transaction at a Bank of America ATM at the company's headquarters in Charlotte, N.C. Bank of America Corp. reports financial results Wednesday, Jan. 16, 2019. (AP Photo/Chuck Burton, File)

NEW YORK (AP) -- Bank of America's fourth-quarter profits rose by 39 percent on an adjusted basis, the bank said Wednesday, helped by last year's steady rise in interest rates as well as a lower tax rate.

The Charlotte-based banking giant said it earned $7.28 billion, or 70 cents a share. That's compared to $2.37 billion, or 20 cents a share, from a year earlier. Last year's results were impacted by the passage of the Republicans' tax law, and several banks, including BofA, had to make an accounting adjustment and write off billions of dollars in what are own as tax-deferred assets.

On an adjusted basis, profits at Bank of America rose from $5.3 billion last year to $7.28 billion. The results beat analysts' forecasts of earnings of 63 cents a share, according to FactSet.

Bank of America has been one of the larger beneficiaries of the recent rise in interest rates, which has allowed it to charge customers more to use credit cards or take out a mortgage. In BofA's consumer banking business, by far its largest division by revenue and profits, net interest income rose 12 percent from a year earlier.

At the same time, Bank of America has kept costs down by not paying its customers much more for their deposits. The average rate that BofA paid on U.S.-based deposits was just 0.63 percent last quarter.

Total revenue, net of interest expense, was $22.74 billion in the quarter. Analysts had been expecting $22.35 billion in revenue.

Bank of America shares rose 4 percent in early premarket trading.