Bank of America Profits Plummeted 18% In The First Quarter Of 2024 Due To Customer Credit Card Delinquencies
Bank of America’s quarterly report has bad news and it could be signs of a weakening economy. Financial statements indicate Bank of America profits plummeted 18% for the first quarter of this year. The company was forced to set aside more money to cover consumer credit card losses.
The bank said profit fell to $6.67 billion. This equals roughly 76 cents a share.
The bank said it’s charge-offs and uncollectable debts rose to $1.5 billion in the first quarter. This debt is mainly from credit card losses. This is up from $807 million a year earlier.
However, Bank of America claims delinquencies are beginning to stabilize.
Are Credit Card Delinquencies A Sign Of A Bigger Problem?
The Federal Bank of New York says household debt shot up by $212 billion to a record $17.5 trillion in the final three months of last year.
The rate of Americans falling into delinquencies was also skyrocketed in the 4th quarter of 2023. American consumers held $1.13 trillion on their credit cards at the end of last year.
A combination of inflation and increased interest rates last year has put pressure on household finances.
Interest rates remain at a 23-year high and a hotter-than-expected inflation report has lessened investor hopes for a rate cut in the coming months.
Bank of America shares also fell another 3% this week.
The bank’s fall in profit included a one-time $700 million charge to pay the FDIC over last year’s bank failures. The bank said it would have earned 83 cents a share excluding the charge.
Revenue also slipped 1.6% to $25.98 billion as net interest income declined from the year before.
Bank of America’s revenue plummeted 5% to $10 billion in the quarter. This was primarily due to lower deposit balances.
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