Bank of America misses profit estimates on trading weakness, books $1.2-billion charge — SkimNews
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- Bank of America posted Q3 profit of US$6.9-billion (91 US cents per share) versus US$8.3-billion (US$1.04) a year earlier; adjusted EPS of US$1.08 missed estimates of US$1.10 per LSEG.
- BofA disclosed a US$1.2-billion charge tied to failures to report over US$5-billion in suspicious activity — the third-largest penalty in U.S. Treasury history — and was placed under a consent order requiring a third party to identify missed transactions.
- BofA sales and trading revenue fell 5% to US$5.1-billion, with FICC trading down 17% on weakness in mortgages, municipals, and credit — a trend also flagged at JPMorgan Chase, Wells Fargo, and Goldman Sachs.
- BofA net interest income jumped 8%, lifted by higher loan and deposit balances and fixed-rate asset repricing, providing a rare positive line in the quarter.
- BofA investment banking fees fell 11% to US$1.8-billion, and the bank slipped from third to fourth in the global investment banking league table for the first nine months, per Dealogic.
- Bank of America shares dropped 6.3% in premarket trading, adding to the stock's 1.9% decline year-to-date.
Why it matters: The US$1.2-billion fine is more than a one-quarter hit — regulators handed BofA a consent order that requires ongoing third-party oversight of its anti-money-laundering program, meaning BofA faces open-ended compliance costs and likely negative-sentiment drag at a moment when trading desks across Wall Street are already missing estimates.
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