Bank of America profit drops on loan-loss reserve build
Bank of America's consumer business reported a 12% jump in revenue
Bank of America Corp. joined other big U.S. banks in reporting a 9% drop in third-quarter profit on Monday as it set aside funds to cover soured loans from a potential deterioration in the U.S. economy.
The second-largest U.S. bank added $378 million to its loan-loss reserves as it braces for a weakening economy. That compares with a release of $1.1 billion a year earlier.
The U.S. Federal Reserve's aggressive monetary policy actions to tamp down inflation have sparked concerns that the economy could slip into a recession as interest rates rise.
"Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts," said chief executive officer Brian Moynihan.
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The bank's consumer business reported a 12% jump in revenue, helped by higher balances and a rise in interest rates.
Ticker | Security | Last | Change | Change % |
---|---|---|---|---|
BAC | BANK OF AMERICA CORP. | 41.95 | +1.98 | +4.95% |
Investment banking fees fell 46% as global dealmaking shrank for the third consecutive quarter after a blockbuster 2021.
The bank, however, managed to retain its top spot in global leveraged finance this year even as deal volumes in the sector shrank by a quarter to $1.4 trillion, according to data from Dealogic.
Excluding items, it earned 81 cents per share, according to Refinitiv calculations, beating the average analyst estimate of 77 cents per share, driven by a 24% gain in net interest income.
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Net profit applicable to common shareholders was $6.6 billion, or 81 cents a share, for the quarter ended Sept. 30, compared with $7.3 billion, or 85 cents a share, a year earlier.