Economic fears and extremely low interest rates drove Bank of America’s profit down by 52% in the second quarter.
Bank of America’s earnings were hit by credit costs of $5.1 billion. The bank said it set aside another $4 billion in reserves to guard against loans that go bad because of the “weaker economic outlook related to Covid-19.”
Like other lenders, Bank of America continues to struggle with extremely low interest rates. The bank reported an 11% drop in net interest income.
Still, Bank of America’s per-share profit of 37 cents beat expectations.
“In the most tumultuous period since the Great Depression, we delivered for our clients, our employees, our communities and our shareholders,” CEO Brian Moynihan said in a statement.
Bank of America’s trading business performed well, with fixed income revenue surging 50% and equities revenue rising 7%.