Brian Moynihan says Bank of America expects 'mild recession' and is preparing for worse

Bank of America CEO Brian Moynihan said Friday that the slope is preparing for a imaginable recession successful 2023, including a script wherever unemployment rises rapidly.

"Our baseline script contemplates a mild recession. ... But we besides adhd to that a downside scenario, and what this results successful is 95% of our reserve methodology is weighted toward a recessionary situation successful 2023," Moynihan said connected a telephone with investors.

That pessimistic case, which is much antagonistic than it was past quarter, calls for unemployment to emergence to 5.5% aboriginal this twelvemonth and stay astatine 5% oregon supra done the extremity of 2024, Moynihan said.

The CEO's connection mirrors the net study for JPMorgan Chase, whose economical outlook calls for "a mild recession successful the cardinal case."

Bank of America beat estimates connected the apical and bottommost lines for its 4th quarter, but its $1.1 cardinal proviso for recognition losses was a crisp reversal from a antagonistic fig successful that metric a twelvemonth ago.

While the slope said nett recognition complaint offs are inactive beneath pre-pandemic levels, outstanding balances connected recognition cards are up 14% twelvemonth implicit year, and Moynihan said delinquencies are rising from their unusually debased pandemic levels.

Shares of Bank of America were down little than 1% connected Friday.