Bank of America's first-quarter profit fell 45% from a year ago, as the bank boosted reserves to cover expected loan losses by $3.6 billion. CEO Brian Moynihan says the country is at war with the coronavirus, and the bank is making sure employees can keep doing their jobs.
The nation's second largest bank earned $4 billion profit during the quarter, down from $7.3 billion a year ago. Earnings per share were 40 cents -- 2 cents short of Wall Street analysts' expectations.
"We have seen major disruption in the financial markets that affected every line of business as customers moved to stay at home status through voluntary and involuntary measures," Moynihan told analysts during a conference call Wednesday morning.
One of the biggest concerns ahead is a potential wave of loan defaults as businesses suffer from closures or slowdowns related to the crisis. BofA set aside a whopping $3.6 billion to cover potential losses.
Helping Employees
About 150,000 of the company's more than 200,000 employees are now working at home, and the bank is paying special compensation for those still working at branches and operations or call centers.
"My teammates know they're playing a critical role for their clients, whether they're people, whether companies of all different sizes, and institutional investors. Their role is to help keep the economy moving as best week can during this health care crisis," Moynihan said.
Moynihan said Bank of America is helping by expanding credit to people and businesses that need it.
"As I've said many times, we're in a war against the COVID-19, and at Bank of America, we're doing our part to help fight the effects of that war," he said.
The bank hired 2,000 employees in March and shifted 3,000 current employees to help with consumer and small business banking. And Moynihan said nobody will be laid off during the crisis. It's also paying employees' child care expenses, including allowing them to hire relatives.
Bank of America's shares were down more than 6% Wednesday morning.
Meanwhile, the bank announced last week that its April 22 annual shareholders meeting will not be held in person this year. Instead it will be a virtual meeting, beginning at 10 a.m.
