Bank of America Q220 net income declines by 52% to $3.5bn. This includes the impact of a $4.0 billion reserve build primarily associated with a weaker economic outlook related to Covid.
Pre-tax income declines by 58% to $3.8bn, with provision for credit losses increasing to $5.1bn, driven by $4.0bn reserve build.
Revenue, net of interest expense, decreases by 3% to $22.3bn. Meantime, net interest income falls by 11% to $10.8bn, driven by lower interest rates, partially offset by loan and deposit growth.
Specifically, deposits increase by 21% to $1.7trn.
CEO Brian Moynihan says: “In the most tumultuous period since the Great Depression, we delivered for our clients, our employees, our communities and our shareholders. Strong capital markets results provided an important counterbalance to the Covid-related impacts on our consumer business. Our industry-leading digital capabilities allow us to support clients amid difficult working conditions.
Bank of America Q220 retail banking key metrics
The bank’s Consumer Banking division posts net income of $71m compared with $3.3bn in the year ago quarter.
Provision for credit losses rise from $947m to $3.0bn. This is primarily due to a reserve build associated with a weaker economic outlook related to Covid.
Loans increase by 8% to $322bn while deposits increase by 15% to $811bn.
Consumer investment assets grew $26bn, or 12%, to $246bn, driven by client flows and market performance.
Global wealth unit net income falls by 42% to $624m with revenue down by 10% to $4.4bn. Lower net interest income and transactional revenue more than offsets the benefits of deposit, loan and assets under management growth.
Client balances increased 1% to $2.9trn, driven by client flows. Merrill adds nearly 6,000 net new households while the Private Bank adds nearly 500 net new relationships.
Bank of America distribution highlights
Bank of America ends the second quarter with 4,298 branches, down a net 51 outlets year-on-year. Branch investments in the second quarter include opening 10 new outlets and renovating a further 17 units.
Active mobile banking users rise by 9% y-o-y to 30.3 million. Total digital banking customers are up by 5% y-o-y to 39.3 million. Other digital highlights include sales with digital now accounting for 47% of all retail banking sales.
The bank reports further growth of the Zelle P2P service, now used by 11.3 million active customers. For example, Zelle users sent and received 117 million transfers worth $32bn in Q220, up 79%.