Bank of America profit falls to $6.9 billion on a $1.2 billion regulatory charge as interest income grows 8%

Bank of America on Wednesday, 14 October, became one of the last big US banks to report third-quarter results. All figures below come from the bank’s own earnings release and presentation.

The headline numbers

• Net income: $6.9 billion, or $0.91 per diluted share, compared with $8.3 billion ($1.04) a year earlier.
• Regulatory settlement charge: $1.2 billion, booked in non-interest expense, which cut earnings by $0.17 a share. Excluding it, adjusted net income was $8.1 billion, or $1.08 a share (a non-GAAP measure).
• Revenue: $30.0 billion, up 3% year on year.
• Net interest income: $16.4 billion, up 8%, helped by higher loan and deposit balances.

Where it was weaker

• Sales and trading revenue fell 5% to $5.1 billion: fixed income, currencies and commodities dropped 17%, while equities rose 11%.
• Investment banking fees fell 11% to $1.8 billion.
• Wealth management was a bright spot: revenue up 13% to $7.1 billion, with asset management fees up 16%.

Capital and credit

Provision for credit losses was about $1.3 billion, roughly flat on the year. The CET1 capital ratio stood at 10.9%, and the bank returned $8.3 billion to shareholders.

CEO Brian Moynihan said that although investment banking and trading revenue were lower, “commercial lending grew in every client segment.” He also said more than 200,000 employees now use AI tools at the bank.

The results round out a week in which JPMorgan missed profit estimates and Goldman Sachs, Citigroup and Wells Fargo reported higher earnings.