Bank of America reported a 16% drop in profit and an 11% reduction in revenue in the third quarter.

Why should we care?
Despite the drop in profits and revenue, CEO Brian Moynihan said consumer spending is increasing. Deposits were up more than 20%, and loans were up 3% in the third quarter. The bank’s reserve for credit losses, at $1.4 billion, was 73% lower than the $5 billion it set aside the last quarter, indicating increased confidence that borrowers will follow through on loan repayments. Bank of America’s moves mirror actions other large banks have taken: JPMorgan Chase and Citi have reduced their set-aside amounts 94% quarter over quarter. Meanwhile, the bank reported 39.3M digital users, up 3% from a year ago. Despite the encouraging signs, Moynihan acknowledged that the pandemic could still throw a few curve balls. “What our data continues to suggest is that we are seeing a return to the fundamentals of a generally sound underlying economy, but we won’t get there unless we fully address the healthcare crisis and its associated effects,” he said.