Bank Of America Stock: $109B Of Paper Losses Spell Trouble

Bank of America (NYSE:BAC) faces a significant paper loss of approximately $109 billion due to its capital allocation decisions during low-interest rate periods. The bank invested heavily in government bonds at high valuations and low yields, resulting in substantial losses as interest rates rose. In comparison, its competitors incurred much smaller unrealized losses. The bank’s lower profitability and disadvantageous position in the market are expected to persist, leading to a negative outlook for Bank of America’s stock (BAC) compared to its peers JPMorgan (JPM) and Citigroup (C).