By Ben Eisen 

Bank of America Corp.'s profit fell 16% in the third quarter, though the bank indicated that it is well prepared to weather the coronavirus recession.

The Charlotte, N.C., lender said Wednesday that it earned $4.88 billion in the July-to-September period, compared with $5.78 billion a year ago and $3.53 billion in the prior quarter.

Profit amounted to 51 cents per share. Analysts polled by FactSet had forecast 49 cents.

America's second-largest bank has struck a more optimistic tone than some of its rivals in recent months, saying that consumption is bouncing back after the initial shock of the economic shutdown.

"We've seen a decent recovery overall already in consumer spending, even with the economy not being fully reopen," Paul Donofrio, the bank's chief financial officer, said at a conference last month.

While Bank of America, like its peers, has put away billions of dollars to cover loan defaults, its provisions have been smaller. Now, the bank and its competitors signaled they are holding off for now on more major reserve builds. JPMorgan Chase & Co. on Tuesday said its profit rose from a year ago and Citigroup Inc. said its profit fell, but both banks set aside less additional money than the previous two quarters for potential loan losses.

In the third quarter, Bank of America set aside $1.39 billion. That was far smaller than its earlier provision of $5.12 billion in the second quarter and $4.76 billion in the first quarter.

The bank posted revenue of $20.34 billion in the third quarter, down 11% from last year. Analysts polled by FactSet had expected $20.8 billion.

Write to Ben Eisen at ben.eisen@wsj.com

 

(END) Dow Jones Newswires

October 14, 2020 07:27 ET (11:27 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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