There was some good and some not so good news in Bank of America’s just reported Q1 earnings report. On one hand, the bank unveiled that its quarterly profit rose 6% to $7.3 billion, a new all time high, even as revenues dipped with the company trimming some more fat (and/or muscle) as operating expenses dropped by 4% to offset the continued shrinkage in the bank’s trading revenues (all of which was discussed previously).
And while the rest of BofA’s results were generally in line if on the soft side, there was one aspect of the quarterly report that was especially notable, and it had to do with the bank’s asset quality.
Here, what was remarkable is that even as the economy is reportedly getting stronger with better consumer trends, Bank of America bumped up its provision for credit losses to just above $1 billion, or $1.013BN to be specific, up over $100MM from both a year earlier and Q4. This was the highest credit loss provision number since in 6 years, or Q2 2013.
What was also notable, is that this increase took place even as net charge-offs remained relatively stable and as the bank’s total nonperforming loans declines by $0.1BN to $4.9BN, “driven by improvements in consumer.”
Which begs the question: if the economy is so strong and the bank’s NPLs are declining, just what is BofA seeing to be raising its loss provision to a 6 year high?
via ZeroHedge News http://bit.ly/2DfTxvt Tyler Durden