Bank of America share price falls as $17bn fine crushes profits

 
Tim Wallace
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Bank of America has tried to cut costs to bolster profits (Source: Getty)
Bank of America Merrill Lynch (Baml) posted a tiny pre-tax profit for the third quarter, as the giant lender was still reeling from its record $17bn (£10.7bn) fine for bad behaviour in the mortgage market.

Pre-tax income came in at $168m, down 93 per cent on the $2.5bn it made in the same period of 2013. And after preferred dividends, the bank made a loss of $70m.

Overall revenues slid one per cent on the year to $21.4bn, and each unit except for mortgages saw an increase in net income.

Its consumer and business arm brought in net incomes of $1.9bn, up from $1.8bn a year earlier. Global wealth and investment management profits rose from $720m to $813m.

Global banking net income came in at $1.4bn, up from $1.1bn a year ago. And Global markets income swung from an $875m loss to a $769m profit.

However, its consumer real estate services unit made a $5.2bn loss, after a $990m loss last year. And non-interest expenses in­creased by 20.5 per cent to $19.7bn, in part because the bank booked a $5.6bn charge over the mortgage fines.

Baml has tried to cut costs to bolster profits, and chopped 18,405 jobs to cut headcount to 229,538. Spending on staff fell by almost $300m compared with the same period of 2013 to $8bn.

Its shares fell 4.6 per cent on the day.

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