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Bank of America chief Brian Moynihan has spent a decade preparing his megabank for the next financial crisis, but he still wasn’t fully prepared for the coronavirus pandemic. On a Tuesday morning call with reporters discussing first-quarter results, the chief executive said his $2.3 trillion bank is ready to weather the unprecedented COVID-19 outbreak, but …
Bank of America chief Brian Moynihan has spent a decade preparing his megabank for the next financial crisis, but he still wasn’t fully prepared for the coronavirus pandemic.
On a Tuesday morning call with reporters discussing first-quarter results, the chief executive said his $2.3 trillion bank is ready to weather the unprecedented COVID-19 outbreak, but admitted he has no idea when it will end or how much pain it will cause before it does.
“At the end of the day, the banking system is going to reflect the global economy,” said Moynihan, acknowledging that large scale economic shutdowns will create pain on both sides of the equation.
Despite being more exposed to this crisis due to being the biggest consumer and commercial lender of any large bank, BofA fared slightly better than JPMorgan Chase and Wells Fargo which reported on Tuesday.
BofA posted earnings of 40 cents per share, missing analyst estimates of 46 cents after the bank saw profits fall by roughly 45 percent compared to the first three months of 2019. For comparison, JPMorgan saw profits slide by almost 70 percent and Wells Fargo was down 89 percent, yielding earnings per share of literally one cent.
BofA also announced that it set aside $3.6 billion in anticipation of many loans going unpaid as businesses remain shuttered by the virus. That number is significantly lower than the amounts set aside by Wells Fargo and JPMorgan.
“We have been preparing for the next crisis,” financial chief Paul Donofrio told reporters, citing the bank’s $700 billion in liquidity as a key data point in its resiliency, adding “We’ve more than tripled our liquidity since the last crisis.”
Despite becoming a key Wall Street player in crisis negotiations with the White House after JPMorgan CEO Jamie Dimon was sidelined by emergency heart surgery in early March, 60-year-old Moynihan seemed unwilling to wade into political waters on the call.
“We’re telling the White House to help people meet their obligations until they can get back to work,” Moynihan said as part of a rambling and noncommital answer to a question on what counsel he’s providing the White House. “The most important thing is that people are accessing credit.”
When pressed on how he feels about the problematic Payroll Protection Program that he helped create, Moynihan was equally non-specific.
“It’s only been like 12 days since we opened this up,” Moynihan said, adding that BofA will be making its first PPP deposits in customer accounts today. “Right now, it’s about getting this program implemented.”
