Many commercial banks in the US have endured a difficult period during the last few months. Those banks that do not have investment banking and trading operations have found the sharp fall in economic activity to be a major challenge. High unemployment rates have meant that borrowers are not in a position to repay their loans. On the other hand, banks with investment banking operations have been able to earn revenue from deal-making as well as trading activities. Big banks like JPMorgan Chase, Bank of America, and Goldman Sachs have been some of the best financial stocks to buy in 2020.
Bank of America Is One Of The Largest US Banks
While the name Bank of America began to appear in the 1920s, the eastern portion of the franchise has its origins as far back as 1784. Today, it is the second-largest bank in the US after JPMorgan Chase and the eighth-largest globally. It is counted as one of the Big Four banks in the US. Bank of America has regional hubs in New York, Hong Kong, London, Toronto, and Dallas. it ranks high, at 25, in the Fortune 500 rankings. Famous investor Warren Buffet is also a major investor in the bank.
Is Bank of America Among The Top Bank Stocks To Buy Right Now
Bank of America has gained 31% since the March market crash. It currently trades at an impressive 3% dividend yield. During the past 5 years, the stock has gained 30%. It is still down 30% from its highs of February 2020. Importantly, Bank of America’s capital position is quite strong. As of October, it had a capital ratio of 11.9% as against a minimum requirement of 9.5%. The liquidity of the bank stands at $860 billion, as revealed in the October Q3 earnings conference. The bank remains well-placed to handle the remaining months of the pandemic-led disruption and come out stronger. Given its scale and strong financial position, Bank of America can be a decent longer-term prospect.