Bank of America Corp. reported a 48.5% drop in first-quarter net income on Wednesday, warning that it anticipated a recession because of the novel coronavirus and setting aside an additional $3.6 billion to cover potential losses.

The second-largest U.S. bank by assets, a bellwether of the economy, said it analyzed a number of recessionary scenarios in arriving at the view that economic output would drop significantly in the second quarter.

The bank’s analysis showed growth would recover slowly from the second quarter, “with negative growth rates in GDP extending well into 2021,” Chief Financial Officer Paul Donofrio said.

Bank of America’s (NYSE: BAC) shares were down 5.7% around 1:13 p.m. Wednesday.

Bank of America joined other major Wall Street banks in their dour outlook on the economy, providing new details about the impact sweeping lockdowns to curb the spread of the virus have had on the economy.

Other major lenders, including JPMorgan Chase & Co., Citigroup Inc. (see below) and Wells Fargo & Co., also bulked up reserves to absorb potential losses.

Including BofA’s reserve build of $3.6 billion, the top four U.S. lenders have set aside a combined $14.2 billion in loan loss provisions. BofA’s total provisions is more than three times its actual first-quarter loan losses of $1.1 billion.

In recent days, amid signs that the spread of coronavirus may be peaking in some areas, governments have started examining when and how they should reopen the economy. Investors and economists are also debating what an eventual recovery would look like.

In a call with analysts, Bank of America Chief Executive Brian Moynihan said the bank was still waiting for signs that the situation was stabilizing.

The bank had seen lower demand for loans from businesses such as credit cards and mortgages through the first two weeks of April compared with the levels in February, before the coronavirus crisis hit United States with full force, Moynihan said.

“We’re watching to see these stabilize at some level of activity,” Moynihan said. “And we’ll keep watching that as states, cities and the federal government focuses on reopening the economy.”

CFO Donofrio, however, said a rush by companies to get loans as they worried about their ability to meet immediate cash needs like payrolls had peaked in March and returned to normal levels in the first week of April.

Bank of America said it extended an additional $57 billion in loans, or a 6% increase during the quarter.

Overall, net income applicable to common shareholders fell to $3.54 billion, or 40 cents per share, in the first quarter, coming in below the 46 cents per share predicted by analysts, according to Refinitiv data. Net interest income declined 2% to $12.1 billion, as interest rates fell.

Sales and trading revenue, excluding certain valuation adjustments, increased 22% to $4.3 billion, with higher revenues in both fixed income and equities. The bank said it increased its global markets balance sheet by $130 billion in early March compared with the year-end to help manage record-breaking market activity.

Citigroup Q1 Profit Tumbles as Loan Defaults Loom

Citigroup Inc. (NYSE: C) reported a 46% plunge in quarterly profit on Wednesday as the bank set aside nearly $5 billion to prepare for an expected flood of defaults on loans due to a virtual halt in economic activity caused by the coronavirus pandemic.

Citigroup recorded a $4.89 billion expense in the quarter, up from $20 million in the year-ago period, to boost reserves against anticipated losses on loans, primarily in its credit cards.

JPMorgan said on Tuesday its profit plunged by more than two-thirds mostly because of a $7 billion addition to loan loss reserves, half of which were for credit cards.

“Our earnings for the first quarter were significantly impacted by the COVID-19 pandemic,” Citi’s Chief executive Officer Michael Corbat said in the earnings statement.

“The deteriorating economic outlook and the transition to the new Current Expected Credit Loss standard (CECL) caused us to build significant loan loss reserves.”

The blow to earnings was cushioned by a surge in fees as trading desks cashed in on the turbulent markets in February and March. Both equities and fixed income trading reported a 39% jump from a year earlier.

Total revenue rose to $20.73 billion, topping Wall Street’s estimate of $19 billion, according to Refinitiv data.

Total net income fell to $2.52 billion, or $1.05 per share, in the three months ended March 31, from $4.71 billion, or $1.87 per share, a year earlier. Earnings per share were also boosted by a 10% reduction in shares outstanding.

Analysts on average had expected Citigroup to earn $1.04 per share.

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