Bank of America said Wednesday that first quarter profit slumped 45% as the company set aside $3.6 billion for loan loss reserves because of the coronavirus pandemic. 

The bank posted profit of $4.01 billion, or 40 cents a share, compared with the 46 cent estimate of analysts surveyed by Refinitiv. Revenue of $22.8 billion essentially matched expectations, and trading results exceeded expectations by more than $500 million. 

The pandemic caused sharp drops in profit at three of Bank of America’s four main divisions. The lender’s giant consumer banking business saw profit lower by 45% to $1.79 billion on higher loan loss reserves and lower interest income. Wealth management profit fell 17% to $866 million and global banking profit was nearly wiped out as the company built larger reserves for commercial loan losses. 

Only the bank’s trading division managed to post an increase in profit of about 33% to $1.48 billion, driven by greater volatility in markets and stronger client activity. 

“Our results reflect the strength of our balance sheet, the diversity of our earnings, and the resilience of our teammates to serve clients around the world,” CEO Brian Moynihan said in the release. “Despite increasing our loan loss reserves, we earned $4 billion this quarter.”

On Tuesday, JPMorgan Chase and Wells Fargo both posted sharp drops in first-quarter profit as the banks set aside a combined $10 billion for a coming deluge of loan defaults. At JPMorgan, the hits were partly offset by record quarterly trading revenue.

That was also the case at Bank of America, where fixed income traders produced $2.7 billion in revenue, about $200 million more than expected and equities traders generated $1.7 billion in revenue, about $300 million more than expected. 

Bank stocks have been pummeled this year as the pandemic put an end to the longest economic expansion in U.S. history. Investors have sold shares in anticipation that the industry will bear the brunt of loan defaults from retail customers to big corporate clients.

Bank of America shares fell 2.4% in premarket trading. 

Here’s how the company did:

Earnings: 40 cents a share

Revenue: $22.8 billion

Net Interest Income: $12.3 billion

Trading Revenue: Fixed Income $2.7 billion, Equities $1.7 billion

Note: Bank added $3.6 billion to loan loss reserves in the quarter

Wall Street had expected earnings per share of 46 cents on revenue of $22.9 billion, based o n the consensus estimates compiled by Refinitiv. Net interest income was expected to come in at $11.7 billion. Trading results at the firm exceeded analysts’ expectations for $2.48 billion in fixed income and $1.39 billion in equities revenue. 

This story is developing. Please check back for updates.

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