Bank of America bond portfolio incurs over $100 billion unrealized losses
Bank of America reported that unrealized losses on its bond portfolio exceeded $109 billion in the third quarter, a 28% increase from the end of June as Treasury yields on seven‑year and ten‑year bonds rose above 5%. The bank’s deposit base remains around $2 trillion, and it plans to replace lower‑yielding bonds as they mature. Analysts note that the losses could dampen investor confidence and pressure the bank’s share‑buyback program, while similar AOCI losses doubled at JPMorgan and Wells Fargo.
Why it matters
The company’s large unrealized losses may lead it to scale back share repurchases, affecting capital returns to shareholders (as noted by Truist Securities analyst Brian Foran). JPMorgan’s share buybacks fell nearly 90% in the quarter, illustrating how banks are adjusting capital deployment ().
Key facts
- 1Unrealized losses on Bank of America’s bond portfolio exceeded $109 billion in Q3. theedgemalaysia.com
- 2The losses represent a 28% increase from the end of June. theedgemalaysia.com
- 3Yields on seven‑year and ten‑year U.S. Treasury bonds are now above 5%. theedgemalaysia.com
- 4Bank of America’s average deposit balances are about $2 trillion. finance.yahoo.com
- 5AOCI losses more than doubled in Q3 at JPMorgan Chase and Wells Fargo. theedgemalaysia.com
- 6JPMorgan’s share repurchases fell nearly 90% in Q3 compared with a year earlier. finance.yahoo.com
Summary written by AlphAI AI Desk from 2 of 2 sources. Not investment advice. Figures are as stated by the linked sources.