(New York) Bank of America on Tuesday announced sharply lower profits in the fourth quarter, as in 2020, the fall in interest rates since the start of the pandemic affecting in particular its retail banking activity.
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The group continued to put money aside to deal with any unpaid debts from its customers, both individuals and businesses, but to a much lesser extent than in previous quarters: Bank of America has provisioned $ 53 million against 4, 8 billion in the first quarter, 5.1 billion in the second quarter and 1.4 billion in the third quarter.
“In 2020, we have witnessed the dramatic effects of the health crisis on the economy and the operations of our company,” company CEO Brian Moynihan said in the statement.
“In the fourth quarter, we continued to see signs of recovery, driven by increased consumer spending, stabilizing demand for loans from our business customers, and strong markets and investments.” , he added, indicating to be encouraged for the future by the latest recovery plan and progress on vaccines.
The establishment saw its net profit decline 23% in the fourth quarter, to 5.21 billion dollars, for a turnover of 20.1 billion dollars, down 10%, details a press release.
The turnover of retail banking in particular fell by 13% due to the cut in interest rates decided by the Federal Reserve to support the economy. This monetary support also has the effect of reducing the money that banks earn on the repayments of loans granted to their customers.
Bank of America credit card users have also cut spending, the company said.
Income from wealth management and investment banking activities also fell, by 5%.
Those generated by the bank’s activity on the financial markets, on the other hand, rose by 14%.
For the year as a whole, marked by the spread of COVID-19 and its harsh consequences for the economy, Bank of America posted a net profit of $ 16.47 billion, down 40%, for a turnover of 85.53 billion dollars (-6%).
On a per share basis and excluding special items, the company’s profit exceeded analysts’ expectations, rising to 59 cents in the fourth quarter from 55 cents expected, and to $ 1.87 for the year versus $ 1.81 expected.
On the other hand, sales were below expectations, in the fourth quarter as in 2020.
The stock was down 1.4% in electronic trading before the stock market opened.
Bank of America also announced on Tuesday its intention to buy back $ 2.9 billion in shares by the end of March.
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