Bank of America profit drops on loan-loss provision

[October 17, 2022]  (Reuters) - Bank of America Corp joined other big U.S. banks in reporting a drop in third-quarter profit on Monday as it set aside funds to cover soured loans from a potential deterioration in the U.S. economy.

A customer uses an ATM at a Bank of America branch in Boston, Massachusetts, U.S., October 11, 2017. REUTERS/Brian Snyder

The second-largest U.S. bank added $378 million to its loan-loss reserves as it braces for a weakening economy. That compares with a release of $1.1 billion a year earlier.

The U.S. Federal Reserve's aggressive monetary policy actions to tamp down inflation have sparked fears that the economy could slip into a recession as funding tightens due to higher interest rates.

Net profit applicable to common shareholders was $6.6 billion, or 81 cents a share, for the quarter ended Sept. 30, compared with $7.3 billion, or 85 cents a share, a year earlier.

(Reporting by Mehnaz Yasmin and Manya Saini in Bengaluru and Saeed Azhar and Lananh Nguyen in New York; Editing by Anil D'Silva)

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