Dive Brief:

• Profit at Bank of America fell 52% in the second quarter, the bank reported Thursday, to $3.5 billion from $7.3 billion a year earlier. It marks the second straight quarter in which the bank's profit has fallen by at least 45%.
• The bank set aside $5.1 billion during the quarter, according to The Wall Street Journal. That breaks down to $1.1 billion in net charge-offs and $3.97 billion in loan loss reserves.
• Revenue tumbled 3% to $22.33 billion — relatively slight compared with hearty swings in either direction in more granular categories.

Dive Insight:

Big gains in deposits (21%) and loans (11%) marked the first full quarter to show the impact of the coronavirus pandemic. But profit at the bank's consumer unit plummeted 98% to $71 million, from $3.3 billion a year earlier. The bank’s net interest income dropped 11% to $10.8 billion, while its noninterest income climbed 5% to $11.5 billion.

Characterizing the quarter as "tumultuous," CEO Brian Moynihan focused on the bank's service to its customers. "We provided billions in credit to clients; announced a $1 billion, four-year commitment to drive economic and racial equality in our communities; strengthened our balance sheet by increasing deposits, capital and loan loss reserves; invested in technology and equipment to help keep our employees safe; and delivered for shareholders, earning more than twice our quarterly dividend," he said Wednesday in a statement.

The bank processed 334,000 Paycheck Protection Program (PPP) loans to connect small-business customers with $25 billion in funding, and has allowed 1.8 million payment deferrals this year, it said.

Amid a precipitous drop in the consumer banking unit, trading saw a boom — with a 35% jump in adjusted trading revenue and a 50% increase in fixed-income trading revenue. The fixed-income segment was up consistently across the board, with Citi seeing a 68% swell in the category, Goldman Sachs reporting a 149% increase and JPMorgan Chase generating a record $7.3 billion in that corner of trading.

Bank of America’s set-asides represented a boost from the $3.6 billion it allocated for souring loans last quarter. But the figure is less than half the $10.5 billion JPMorgan Chase set aside, sparking questions of whether it's enough.

"We're analyzing each relationship individually," CFO Paul Donofrio said, according to Bloomberg. "We're going through the whole loan portfolio. Our teams have done that. We have really studied this and worked very closely with our customers."

By comparison, Wells Fargo set aside $9.5 billion for credit losses in the second quarter. Citi set aside $7.9 billion.