The millions of dollars earned from Paycheck Protection Program transactions will help cover rising provision costs tied to the new CECL accounting standard and coronavirus shocks to loan books.
More details have emerged about the damage the coronavirus pandemic is inflicting on the hospitality industry. One servicer alone has received 2,000 workout requests in the past month.
Banks had an opportunity to delay compliance with the new accounting standard, but many opted to move forward to get ahead of credit issues that could arise from the coronavirus outbreak.
After more than tripling its loan-loss provision, the $182 billion-asset company became the first large U.S. bank to report a quarterly loss as a result of the coronavirus pandemic.
With the coronavirus pandemic bringing economic activity to a virtual standstill, BofA, like Wells Fargo and JPMorgan Chase, is shoring up its reserves to brace for a likely recession.
