Bank of America reported its second-quarter 2020 financial results today. "It is the most tumultuous period since the Great Depression for Bank of America", says its CEO Brian Moynihan. The fall in revenue and profit was broadly in line with other Main Street peers that have suffered from the need to brace for a deep recession.
Bank of America Corp.’s profit tumbled 52% in the second quarter after the bank set aside billions of dollars to prepare for soured loans. The Charlotte, N.C.-based bank said Thursday that it earned $3.53 billion, versus the $7.35 billion it made a year earlier. Per share, earnings of 37 cents were above the 28 cents that analysts polled by FactSet had forecast, as reported by The Wall Street Journal.
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, by serving approximately 66 million consumers.
Bank of America saw its profit more than halve in the second quarter as it set aside $5 billion to cover potential loan losses, while warning that it would struggle as long as interest rates stayed low. The fall in revenue and profit was broadly in line with other Main Street peers that have suffered from the need to brace for a deep recession, while profiting from the surge in financial market trading since February, Reuters wrote.
Q2-20 Financial Highlights
- Net income of $3.5 billion, or $0.37 per diluted share, includes the impact of a $4.0 billion reserve build primarily associated with a weaker economic outlook related to COVID-19;
- Pretax income declined 58% to $3.8 billion;
- Pretax, pre-provision income down 9% to $8.9 billion;
- Loan and lease balances in the business segments rose $96 billion, or 11%, to $1.0 trillion;
- Provision for credit losses increased to $5.1 billion, driven by $4.0 billion reserve build;
- Revenue, net of interest expense, decreased 3% to $22.3 billion;
"In the most tumultuous period since the Great Depression, we delivered for our clients, our employees, our communities and our shareholders. Strong capital markets results provided an important counterbalance to the COVID-19-related impacts on our Consumer business, and our industry-leading digital capabilities allowed us to support clients amid difficult working conditions," Chairman and CEO Brian Moynihan stated.
Q2-20 financial results show that, Bank of America announced $25 million commitment to the launch of a new Smithsonian Institution initiative to further how Americans understand, experience and confront issues involving race. Committed $100 million to support and address pressing needs of health crisis, including health care, food and education. Lowered the employee matching gift minimum to $1 and doubled the match for employee donations to 17 organizations focused on racial equality.
Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.