The Atlanta Journal-Constitution
Bank of America’s profit doubles, Citigroup’s triples in first quarter
Big banks benefit from release of billions from loan-loss reserves.
Two major U.S. banks reported major first-quarter gains in profits Thursday, helped by the release of billions from their loan-loss reserves.
Citigroup’s profits more than tripled in the first quarter and Bank of America’s doubled in the first three months of the year. They are the latest of the big banks to say they have released funds from their reserves, following Jpmorgan Chase and Wells Fargo, which announced results Wednesday. The big banks collectively set aside tens of billions of dollars a year ago to cover the potential losses they might incur as the economy nose-dived in the early months of the pandemic.
New York-based Citigroup said it earned a profit of $7.94 billion, or $3.62 per share, compared with a profit of $2.54 billion, or $1.06 a share, in the same period a year earlier. The bank’s profits were well above the $2.60 per share that analysts had been looking for, according to Factset.
Charlotte, North Carolina-based Bank of America earned $8.1 billion in the quarter, equal to 86 cents per share, compared with a profit of $4.01 billion, or 40 cents a share, in the same period a year earlier. Analysts were looking for Bofa to earn 66 cents a share.
The bank had a net one-time gain of $1.86 billion for releasing loans from its loan-loss reserves.
Bofa had a strong quarter in its investment banking division, where total profits rose to $2.05 billion from $1.71 billion in the same period a year earlier. The bank saw revenue gains on its trading desks, a reflection of the healthy volatility the markets had last quarter.