Bank of America profit rises to $8.1bn in Q1q 2021

Photo: AP

The post-pandemic economic recovery allowed Bank of America to spur its credit activities and post a profit of 8.1 billion dollars for the first quarter of 2021, Reuters reported. The positive financial results came as the bank unfolded funds that had been kept stashed for emergency operations as the pandemic was seen deteriorating economy. But with those fears behind its back, Bank of America was allowed it to release billions from its loan-loss reserves.

Bank of America is the latest of the big banks to say it has released billions from its reserves, following JPMorgan Chase and Wells Fargo. The banking giant earned $8.1 billion in the quarter, compared to a profit of $4.01 billion in the same period a year earlier. The bank had a net one-time gain of $1.86 billion for releasing loans from its loan-loss reserves.

Like JPMorgan Chase and Goldman Sachs, which also reported its results, BofA had a strong quarter in its investment banking division. Total profits in the division 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.

One thing that negatively impacted BofA and hurt the other banks as well in due time is low interest rates. The bank’s net interest income fell from $12.13 billion last quarter to $10.2 billion in this quarter. BofA’s balance sheet tends to skew toward financial products with a shorter duration, so more of the bank’s balance sheet changed to lower interest rate products than its competition. Overall revenue at the bank was $22.82 billion, relatively flat compared to the $22.77 billion reported last year.

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