Bank of America said it would recognize a $1.6 billion charge tied to the transition away from the London Interbank Offered Rate.
The charge will reduce earnings for the fourth quarter of 2023, which are due to be released Friday, the bank said in a disclosure Monday. The bank said the $1.6 billion would be added back into interest income over the next few years, making the actual impact effectively nothing.
The charge relates to an index that was established as a replacement for Libor, called the Bloomberg Short-Term Bank Yield Index. The bank entered into interest rate swaps tied to that index for cash flow hedges on its balance sheet.
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