Bank of America Quarterly Profit Falls 22%
19 Gennaio 2021 - 01:37PM
Dow Jones News
By Ben Eisen
Bank of America Corp.'s earnings fell 22% in the fourth
quarter.
The second-largest bank in the U.S. said Tuesday that its profit
totaled $5.47 billion in the final three months of the year, versus
$6.99 billion a year earlier. Per-share earnings of 59 cents topped
analyst estimates of 55 cents a share.
Bank of America released $828 million of its reserves, a sign
that its executives believe there may not be as much consumer and
business distress as initially thought. JPMorgan Chase & Co.
and Citigroup Inc. said Friday they were releasing some of their
reserves, reflecting an improving economic outlook.
The largest banks spent the first part of last year building up
reserves to prepare for a wave of loan defaults.
The Federal Reserve, which had restricted banks' returns to
shareholders last year, told them last month they could once again
buy back their own stock, with limits. Bank of America said Tuesday
that its board authorized a $2.9 billion repurchase plan for the
first quarter.
While the continued spread of Covid-19 has put millions out of
work and left many unable to pay their bills, consumers overall
have continued to spend. Chief Executive Brian Moynihan said, "we
continued to see signs of a recovery, led by increased consumer
spending, stabilizing loan demand by our commercial customers, and
strong markets and investing activity."
The bank's revenue totaled $20.1 billion in the fourth quarter,
down 10% from the fourth quarter of 2019. Analysts polled by
FactSet had expected revenue of $20.58 billion.
Shares in Bank of America rose 0.8% in premarket trading. Bank
stocks started the year strong, in part on the prospect of rising
interest rates, though they fell sharply Friday along with the
broader markets. The KBW Nasdaq Bank Index has climbed 9.2% this
year, versus a 0.3% rise in the S&P 500.
Write to Ben Eisen at ben.eisen@wsj.com
(END) Dow Jones Newswires
January 19, 2021 07:22 ET (12:22 GMT)
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