Bank of America’s profit fell 52%, the company joined its competitors in preparation for consumer defaults caused by the economic consequences of the pandemic. Consumer bank profits fell by 98% due to a sharp increase in reserves. Investment and bank fees are rising to a record level, debt trading is growing. The company allocated $ 5.1 billion in loan losses in the second quarter, most of all since 2010, as Bank of America is in solidarity with its competitors in predicting the upcoming pain, which contrasts with stock market optimism about a quick economic recovery.
JPMorgan Chase & Co., Wells Fargo & Co., and Citigroup Inc. allocated nearly $ 28 billion in loan loss provisions when they reported results earlier this week, citing a worsening outlook. Nevertheless, Bank of America benefits from the instability in the financial markets caused by the pandemic like other companies and has become the best quarter since 2012 in terms of trading revenue. Fixed-income trading revenue was better than forecast in the second quarter, up 50% to $ 3.2 billion, while investment and bank fees jumped 57% to a record $ 2.2 billion. The bank’s efficiency ratio, profitability indicator, fell to 60% from 59% in the first quarter. Net income fell to $ 3.53 billion from $ 7.35 billion a year earlier, as reported Bloomberg.
Bank of America shares have fallen 32.06% since the beginning of the year and now have a price of $ 23.88 per share.