Bank of America posts profit as fewer loans go bad
Bank of America Corp on Wednesday posted a quarterly shareholder profit of USD 2.22 billion, reversing a year-earlier loss, as fewer loans went bad.
New York: Bank of America Corp on Wednesday posted a quarterly shareholder profit of USD 2.22 billion, reversing a year-earlier loss, as fewer loans went bad.
The bank's loan portfolio performed better, but results deteriorated in three of its five major businesses - consumer real estate, commercial and investment banking, and sales and trading.
Chief Executive Brian Moynihan has been struggling to put the bank's legal problems behind it and start building revenue. Excluding gains and losses from changes in the value of the bank's debt, revenue in the third quarter fell 1.5 percent to USD 22.19 billion.
The second-largest US bank earned 20 cents per share, beating analysts' average estimate of 18 cents, according to Thomson Reuters.
In the year-earlier quarter, the bank recorded a net loss attributable to common shareholders of USD 33 million due to accounting adjustments, litigation expenses and tax charges.
In the latest quarter the bank was helped by the improved performance of its loan portfolio. It wrote off USD 1.69 billion of loans, down from USD 4.12 billion a year earlier.
With loans performing better and delinquencies falling across all consumer portfolios, Bank of America set aside USD 296 million to cover bad loans, compared with USD 1.77 billion in the same quarter last year.
Sales and trading revenue for the bank's fixed income, currency and commodities business, excluding an accounting adjustment, fell by USD 501 million to USD 2.0 billion due to lower bond-trading volumes for much of the quarter.
Fixed-income traders were inactive for several weeks leading up to the Federal Reserve's meeting in mid-September in the expectation that the central bank would announce that it was starting to wind down its bond-buying stimulus program.
Bank of America sold its remaining stake in China Construction Bank Corp 01939.SS for USD 1.47 billion in September, contributing USD 750 million pre-tax to the bottom line.
Bank of America shares have risen 23 percent this year, in line with gains in the KBW index of bank stocks. The shares were little changed in premarket trading after closing at USD 14.24 on Tuesday.