Latest Videos

{{ currentStream.Name }}

Related Video

Continuous Play:

The information you requested is not available at this time, please check back again soon.

More Video

Jul 16, 2020

BofA joins banking giants setting aside billions for bad loans

Morgan Stanley, Bank of America report big gains in Q2


Security Not Found

The stock symbol {{StockChart.Ric}} does not exist

See Full Stock Page »

Bank of America Corp.’s profit slid 52 per cent as it joined rivals in preparing for an onslaught of consumer defaults spurred by the pandemic’s economic fallout.

Profit at the consumer-banking unit plunged 98 per cent as the coronavirus shuttered much of the U.S. economy and caused tens of millions of Americans to lose their jobs. The company allocated US$5.1 billion for loan losses in the second quarter, the most since 2010, as Bank of America joined its biggest rivals in predicting pain to come that contrasts with stock market optimism for a quick economic rebound.

Calling it “the most tumultuous period since the Great Depression,” Chief Executive Officer Brian Moynihan said in a statement that “strong capital markets results provided an important counterbalance to the COVID-19-related impacts on our consumer business.”

With its 4,300 branches across the country, Bank of America is often seen as a bellwether for the U.S. consumer. Government stimulus measures and bank forbearance have kept some individuals and businesses afloat, but the largest U.S. lenders used the first full quarter with the pandemic to prepare for coming pain.

JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. set aside almost $28 billion of credit-loss provisions when they reported results earlier this week, citing a deteriorating outlook.

Shares of Charlotte, North Carolina-based Bank of America slipped two per cent to US$24.10 at 6:58 a.m. in early New York trading. They had declined 30 per cent this year through Wednesday.

The bank joined other Wall Street firms in profiting from volatility in financial markets resulting from the pandemic. Fixed-income trading revenue beat forecasts in the second quarter, rising 50 per cent to US$3.2 billion, while investment banking fees jumped 57 per cent to a record US$2.2 billion.

Net interest income -- revenue from customers’ loan payments minus what the company pays depositors -- fell 11 per cent to US$10.8 billion in the second quarter. On a fully taxable-equivalent basis, the figure was US$11 billion, falling short of the US$11.2 billion average estimate of 11 analysts in a Bloomberg survey.

In the consumer business, the bank said it had processed about 1.8 million payment deferrals this year, of which 1.7 million were still in place as of July 9.

Also in the second-quarter results:

  • The bank’s efficiency ratio, a measure of profitability, worsened to 60 per cent from 59 per cent in the first quarter.
  • Net income fell to US$3.53 billion from US$7.35 billion a year earlier. Per-share earnings totaled 37 cents, beating the 25-cent average estimate of 23 analysts.