Investing.com - Bank of America (NYSE:BAC) said on Wednesday it booked some $4.8 billion in provisions and impairments in the first quarter as the U.S. started to lock down in response to the Covid-19 virus.
After $3.6 billion in provisions and $1.1 billion in charge-offs, the bank's earnings came to 40 cents a share, well below analysts' forecasts of 59c. Net income fell to $4.0 billion from $7.3 billion a year earlier.
Revenue was slightly ahead of expectations at $22.77 billion in the quarter, although it was hit by lower interest income as the Federal Reserve and other central banks cut interest rates around the world.
The bank's common equity tier 1 ratio, a measure of financial strength, fell 41 basis points on the quarter to 10.8%, still comfortably above a minimum requirement of 9.5%.
"Despite increasing our loan loss reserves, we earned $4 billion this quarter, maintained a significant buffer against our most stringent capital requirement, and ended the quarter with more liquidity than when we began," said CEO Brian Moynihan.
Bank of America shares are down 32% from the beginning of the year, still down 33.6% from its 52 week high of $35.72 set on December 27, 2019. They are under-performing the S&P 500 which is down 12.3% year to date.
Bank of America follows other major Financial sector earnings this month
Bank of America's report follows an earnings miss by JPMorgan on Tuesday, who reported EPS of $0.78 on revenue of $29.07B, compared to forecasts EPS of $2.28 on revenue of $29.53B.
UnitedHealth had beat expectations on Wednesday with first quarter EPS of $3.72 on revenue of $64.42B, compared to forecast for EPS of $3.63 on revenue of $64.18B.
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