Bank of America, scheduled to announce results Jan. 15, may have boosted fourth-quarter profit more than four-fold to $3.3 billion, according to the estimates. Net income for the year may amount to $11.2 billion, the most that the Charlotte, North Carolina-based lender has earned since 2007. Bank of America’s earnings rebounded from 2012, when profit fell because of mortgage-related settlements.

Citigroup, set to report a day later, is estimated to say profit more than doubled to $3.14 billion in the quarter or $14.2 billion for the year, the most since 2006. Earnings rebounded from a year earlier, when the New York-based firm booked costs tied to a mortgage settlement.

Probes weren’t the only drag on earnings for banks in 2013. A slump in fixed-income trading probably cut revenue from that business 10 percent, according to Deutsche Bank’s O’Connor.

Goldman Sachs, which set a record for fixed-income revenue in 2009, suffered the steepest decline at 23 percent, he estimated. The New York-based firm, the nation’s fifth-largest bank, will say quarterly income fell 28 percent to $2.09 billion when it reports results Jan. 16, according to analysts’ estimates. Morgan Stanley is set to report results a day later and will probably say that profit for the period rose 70 percent to $859 million.

Fed Effect

The reduction of monthly bond purchases by the Fed may continue to damp fixed-income trading. Rising interest rates linked to Fed actions also cut mortgage revenue last year as fewer homeowners refinanced.

“There was hope that with the start of tapering and the resolution of the Volcker Rule, there would be more trading activity, but I don’t think that happened, so fixed income will be lackluster,” said Charles Peabody, an analyst at Portales Partners LLC in New York, referring to the part of the 2010 Dodd-Frank Act that seeks to curb proprietary trading by banks. “Mortgage banking will remain in the doldrums until mid-2014.”

Banks are focusing on expenses they can control, Erika Najarian at Bank of America wrote in a Dec. 16 note. The six biggest lenders reduced their workforce by 29,000 in the first nine months of 2013, or 2.6 percent, data compiled by Bloomberg show. Many cuts targeted mortgage personnel.

‘Remain Upbeat’

As firms report results, investors will focus more on executives’ forecasts for 2014 than last year’s numbers, said Richard Staite, an analyst at Atlantic Equities LLP in London, who cut profit estimates for the three biggest U.S. lenders because of higher legal costs and weaker fixed-income revenue.