Better Buy: Bank of America vs. US Bancorp
The COVID-19 crisis has been downright awful for the entire financial sector. Banks have been sold based on fears of rising consumer and corporate delinquencies. The big provisions for loan losses have been taken, but so far we haven't seen the big writedowns of assets. The banking sector could become a buy if those writedowns don't happen, which would be a function of how fast the economy recovers and the state of COVID. That said, if you were to dip a toe into the sector, which type of bank would perform better: Bank of America, the massive global bank, or US Bancorp, the smaller, more traditional bank?
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Bank of America is the epitome of the global bank, with investment banking operations as well as traditional banking. In the past, Bank of America would have been called a money center bank. It serves the biggest U.S. corporations, and has a global presence and massive trading operations. While Bank of America's roots were in plain vanilla commercial banking, it was one of the first commercial banks to build business lines into traditional investment banking lines.
Source Fool.com
