The company’s shares fell 2% in pre-market trading.
Analysts have long viewed Bank of America, with its large deposit base, as the major bank most sensitive to fluctuations in interest rates. The Federal Reserve has said it will maintain a zero rate policy for years in response to the coronavirus pandemic. This reduces the spread that banks earn by accepting deposits and making loans.
The bank’s net interest income fell 17% from a year earlier to $ 10.2 billion. CEO Brian Moynihan said the key figure would likely hit a low in the third quarter.
The company said it had an allowance of $ 1.4 billion for credit losses in the quarter, well below the $ 5.1 billion in the prior period. Bank of America, the second-largest U.S. lender by assets, recorded a total allowance of $ 9.8 billion for credit losses in the first two quarters of 2020.
JPMorgan Chase and Citigroup each released results that exceeded analysts’ expectations, with companies putting less money aside for delinquent loans.
Bank of America shares have fallen 29% so far this year, a slightly better performance than the KBW Bank index.
Here’s what Wall Street has been waiting for:
Earnings: 49 cents per share, 12% less than the previous year, according to Refinitiv.
Revenue: $ 20.8 billion, 9.4% lower than a year earlier.
Net interest margin: 1.82%
Trading income: fixed income $ 2.28 billion, stocks $ 1.2 billion
This story is developing. Please come back for updates.