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BAC Drops as Revenues Fail to Hit Targets

Oct 14, 2020 ( via COMTEX) --
Bank of America (NYSE:BAC) shares fell Wednesday's after the lender posted third-quarter results that missed on revenue.

The bank said it generated $20.45 billion in total revenue, missing the $20.8 billion estimate of analysts. Profit in the quarter slumped 16% to $4.9 billion, or 51 cents a share, edging out the 49-cent estimate.

Analysts have long considered Bank of America, with its vast deposit base, as the big bank most sensitive to swings in interest rates. The Federal Reserve has said it will maintain a zero-rate policy for years in response to the coronavirus pandemic. That squeezes the spread that banks earn by taking in deposits and making loans.

The bank's net interest income fell by 17% from a year earlier to $10.2 billion. CEO Brian Moynihan had said that the key figure will likely bottom in the third quarter.

The bank said it had a $1.4 billion provision for credit losses in the quarter, much less than the $5.1 billion in the previous period. Bank of America, the second-biggest U.S. lender by assets, has booked a total $9.8 billion provision for credit losses in the first two quarters of 2020.

JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE:C) each posted results that beat analysts' expectations as they set aside less money for defaulting loans.

Shares of Bank of America have declined 29% this year, a slightly better performance than the KBW Bank Index. They opened Wednesday down 69 cents, or 2.8%, to $24.26.

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