Financial institution of America (BAC) earnings for the fourth quarter of 2020

Brian Moynihan, Bank of America, speaks at the WEF in Davos on January 21, 2020

CNBC

Bank of America on Tuesday reported a fourth quarter profit that exceeded analysts’ expectations as the company released some of the money it had reserved for credit losses.

The company announced that earnings were down 28% to $ 5.47 billion, or 59 cents per share, compared to the 55 cents estimate by analysts surveyed by Refinitiv. Revenue declined 10% to $ 20.2 billion and missed estimate by about $ 500 million.

“We continued to see signs of recovery in the fourth quarter, led by increased consumer spending, stabilization in credit demand from our commercial customers, and strong markets and investment activity,” said CEO Brian Moynihan in the press release. “The latest stimulus package, continued advances in vaccines, and our talented teammates who have done a good job for their clients during this crisis position us well as the recovery continues.”

Last week, rivals JPMorgan Chase and Citigroup each posted profits that exceeded analysts’ expectations as the companies combined released $ 4.4 billion in credit risk reserves.

Bank of America, the second largest U.S. lender by assets, posted $ 11.3 billion in loan loss provisions in the first three quarters of 2020.

Like JPMorgan, which posted record fourth-quarter results for its investment bank, Bank of America could see its trading activity spike.

Early Tuesday, Bank of America announced that it was planning to repurchase shares valued at $ 2.9 billion and approximately $ 300 million worth of shares in the first quarter in exchange for the shares made available to employees balance. It also said it would keep its quarterly dividend of 18 cents.

Bank of America stocks fell 15% in 2020, compared with the KBW Bank Index’s 4.3% decline.

Here’s what Wall Street expected:

Result: 55 cents per share, 26% less than in the same period last year, according to Refinitiv.
Revenue: $ 20.7 billion, down 8.1% from a year earlier.
Net interest margin: 1.74%
Trading Revenue: Fixed Income $ 2.11 billion, Equities $ 1.22 billion

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