Bank of America profit more than halves on pandemic woes
Adds CEO quote, results
July 16 (Reuters) - Bank of America Corp BAC.N reported a drop of more than 50% in second-quarter profit on Thursday, even as it set aside only about half as much in reserves as some of its peers against a potential wave of defaults due to the coronavirus crisis.
Net income applicable to common shareholders fell to $3.28 billion, or 37 cents per share, for the quarter ended June 30 from $7.11 billion, or 74 cents per share, a year earlier.
Analysts on average had expected 26 cents per share in adjusted earnings, according to Refinitiv.
The lender's provisions include $4 billion reserve build to cover expected loan losses as it braced for the worst recession in generations caused by the novel coronavirus outbreak.
Three of the largest U.S. banks said on Tuesday they had set aside a whopping $28 billion for loan losses, in a stark reminder that much of the economic pain from the coronavirus pandemic is still to come.
"Strong capital markets results provided an important counterbalance to the COVID-19-related impacts on our Consumer business," Chief Executive Officer Brian Moynihan said, calling the quarter "the most tumultuous period since the Great Depression".
Net income for the bank's global markets unit rose 81% to $1.9 billion.
Net interest income (NII), a key measure of how much banks can make from their lending activities, has, however, been pressured by the pandemic as the U.S. Federal Reserve slashed interest rates to near-zero levels.
Bank of America's NII fell 11% to $10.8 billion.
The Charlotte, North Carolina-based lender is especially vulnerable to rate movements because of the composition of its balance sheet.
(Reporting by Noor Zainab Hussain in Bengaluru and Imani Moise in New York; Editing by Lauren Tara LaCapra and Anil D'Silva)
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