According to the research data analyzed and published by ForexSchooOnline.com, the total profit for H1 2020 amounted to $7.5 billion. Q1 profit totaled $4 billion, a drop of 45% YoY, while in Q2, the total was $3.5 billion, marking a 52% decline YoY.
According to the same source, pre-tax pre-provision income was $9.3 billion in Q1, marking a 5% drop YoY. During Q2, the drop was higher, which was at 9%, resulting in a total income of $8.9 billion despite the effect of the Fed’s emergency rate reductions.
Trading volumes grow 31% YoY during H1 2020 but BAC stock down 30% YTD
Due to the Fed’s emergency rate reductions, Q2 interest income declined 11% YoY to $11 billion. However, total deposits increased by $284 billion to $1.7 trillion. As a result, the balance sheet at the end of Q2 2020 showed a total of $2.7 trillion in assets.
Though the profits for H1 2020 showed a decline of 49% YoY, the bank’s performance beat expectations. Part of the reason behind this was a 35% increase YoY in sales and trading revenue. Compared to the first half of 2019, there was an improvement of $1.9 billion in sales and trading. Notably though, there was a 5x increase in provisions for loan losses from $1.9 billion in H1 to $9.9 billion in H2.
BAC stock has dropped almost 30% since the start of 2020 to early September, currently trading at $26. According to a Trefis estimate, however, its valuation should be almost 20% higher, at $29. This is based on improved performance during H2 2020. The banking sector as a whole is still struggling due to its close ties with the economy. According to the KBW Bank Index as well as the STOXX North America 600 Bank Index, it is at least 31% down YTD.