Derivatives valuation swings lop $2.4bn off BofA’s income in Q2

DVAs and markdowns on fair-value hedges return to drag on dealer’s revenue

Adjustments to the value of Bank of America’s derivatives, which had temporarily boosted revenue in the first quarter, turned into a headwind over the following three months, generating $2.4 billion of paper losses.

The bank’s other comprehensive income (OCI) for the second quarter included a $2 billion markdown on derivatives, which offset virtually all of the gains recorded in Q1. The bank did not disclose the type of derivatives involved nor did it respond to a request for comment, but

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