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BofA returns to profits as consumer banking gains
[NEW YORK] Bank of America reported Wednesday that it returned to profitability in the third quarter, but operating results declined in global banking and some other key divisions.
The giant US bank reported net income of US$4.5 billion in the quarter ending September 30, compared with a US$232 million loss in the year-ago period due to large legal expenses.
Revenue dipped 2.4 per cent to US$20.91 billion.
BofA posted higher profits in its consumer banking business, thanks to increases in deposits, mortgage originations and credit card issuances.
But earnings fell in other divisions, including global banking, where underwriting fees declined in line with lower industry volumes. Profits also declined in global wealth and investment management.
In global markets, BofA reported higher profits because of elevated legal expenses in the year-ago period. But revenues dropped in the closely watched fixed income, currencies and commodities trading, as market volatility weighed on volumes.
"We saw solid results," said chief executive Brian Moynihan. "The key drivers of our business - deposit taking and lending to both our consumer and corporate clients - moved in the right direction in this quarter and our trading results on behalf of clients remained fairly stable in challenging capital markets conditions." Earnings translated into 37 cents per share, four cents above analyst expectations.
BofA shares rose 1.7 per cent to US$15.78 in pre-market trade.