Bank of America
declined in the third quarter as the bank was weighed by the continuing effects of operating in a low-interest environment.
Revenue for Bank of America (ticker: BAC) came lower than expected as the bank – like the rest of its cohort – struggled with the economic impact of the coronavirus pandemic. The bank earned 51 cents a share on revenue of $ 20.3 billion. Analysts polled by FactSet expect the bank to report earnings of 49 cents per share on revenue of $ 20.8 billion.
Net income was $ 4.9 billion, down 16 percent from the previous quarter.
As the economy continued to recover, we generated nearly $ 5 billion in profits this quarter, reflecting the diversity of our business model, our market leadership and digital capabilities, and our commitment to responsible growth, ”said Brian Moynihan, Chairman and CEO of Bank of America, said in a statement.
Shares of the bank fell 5% on Wednesday, meanwhile
has decreased by 0.7%, and
Dow Jones Industrial Average
The results of the third quarter were partially mitigated by the actions of the Federal Reserve to reduce interest rates to almost zero earlier this year. Bank of America said net interest income fell 17 percent to $ 10.1 billion from the previous quarter due to the impact of lower interest rates.
Sales and trading results, which were a bright spot for banks during the volatile first half of the year, were more muted for Bank of America. Revenue of $ 2.2 billion was roughly in line with last year’s third quarter and well below the $ 4.2 billion the bank reported in the second quarter.
The bank’s loan loss provisions were $ 1.4 billion in the quarter, which is lower than the $ 5.1 billion set aside in the previous quarter but still reflects the uncertain economic environment.
Wall Street is paying close attention to banks’ profits to gain a broader understanding of how the economy is doing.
Although banks did not have to spend as much on bad loans this quarter as they did in the last two quarters, they are not yet ready to declare victory.
(JPM) and Citigroup (C) reported financial results on Tuesday and struck a cautious tone, although their results were better than expected. Executives note that some of the losses they have prepared for cannot be seen until next year, as stimulus measures run out, especially if unemployment remains high.
(GS), which advanced by 0.2%, and
(WFC), which fell 6%, also reported results on Wednesday.
Morgan Stanley (MS)
announced its results on Thursday.
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