NEW YORK -- Bank of America (BAC.N) said Wednesday that its fourth-quarter profits fell by nearly half from a year ago, as the bank had to book US$2.9 billion in charges related to the new tax law.

The consumer banking giant said it earned US$2.37 billion, or 20 cents a share, down from US$4.54 billion, or 39 cents a share, from the same period a year ago.

Like many banks this quarter, Bank of America had to write down the value its stockpile of deferred tax assets on its balance sheet. The assets are basically credits it could have used to pay future income taxes that built up after the 2008 financial crisis, when banks like BofA had billions of dollars in losses from bad mortgages and other toxic investments. Because the maximum corporate tax rate was reduced from 35 per cent to 21 per cent under the Republican tax law, Bank of America and other financial companies had to revalue those credits.

The bank also had to write down US$946 million in renewable energy investments that were also impacted by the tax law.

Outside of the impact of the tax law, Bank of America's quarterly results benefited from rising interest rates. The Federal Reserve has raised interest rates four times in the last year, and that allows banks like BofA to charge more to borrowers for loans. Net interest income at Bank of America rose 11 per cent from a year earlier to US$11.46 billion.

Trading revenues fell 11 per cent to US$2.5 billion in the quarter. Many banks have reported declines in trading revenue for the fourth quarter as markets were abnormally calm last year, which kept investors from actively trading.

Total revenue at the bank was US$20.44 billion, up from US$19.99 billion in the same period a year earlier.