Bank Buybacks Are Dead for 2020 on Coronavirus Loss Provisions

The biggest U.S. banks have to recognize potential loan losses more quickly under accounting rules that took effect in January, a shift that means share buybacks are unlikely for at least the rest of 2020.

As the economy buckles under the weight of the coronavirus pandemic and more borrowers struggle to make payments, top lenders may have to set aside as much as $164 billion in loss provisions this year, according to analysts’ estimates. That would wipe out profits, though trading revenue is expected to rise because of market volatility.

Regulators are trying to cushion the blow. In this year’s ...