Bank of America has beaten analyst predictions to post a quarterly profit of US$4.5bn, after netting a loss of US$232m this time last year, with total profit this year now above US$13bn.
Huge legal expenses last year hit profitability, but Q3’s results, well up on estimates, is a boon to the company, with the investment bank’s US$391m it generated in advisory fees the second-highest quarterly figure since the merger with Merrill Lynch.
Those legal fees last year were actually US$6bn, down to US$231m now, while net interest income fell 6.7pc to US$9.74bn, and bond trading revenue declined almost 11pc to US$2bn.
“We saw solid results this quarter by continuing to execute our long-term strategy,” said CEO Brian Moynihan.
“Our balanced approach to serving customers and clients is on track as the economy continues to move forward.”
Despite the huge profits, revenues have in fact dropped by 2.4pc to US$20.9bn, down on some predictions, but the mood seems to be positive.
“The key drivers of our business – deposit taking and lending to both our consumer and corporate clients – moved in the right direction this quarter and our trading results on behalf of clients remained fairly stable in challenging capital markets conditions,” added Moynihan.
Expenses have dropped, with mortgage fees rising, helping to steer the company in the right direction.
Moynihan has led the company for a number of years now but during the summer changes were made at a high level, with the CEO replacing Bruce Thompson with Paul Donofrio in the CFO role.
Moynihan himself survived a shareholder vote of confidence only a few weeks ago.
“Our results this quarter reflect our ongoing efforts to improve operating leverage while continuing to invest in our business,” said Donofrio.
“We built capital and liquidity to record levels and grew total loans for the second consecutive quarter while continuing to operate within our risk framework.”
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