COST cuts paid off at Bank of America Merrill Lynch in the third quarter as the group swung back to profit, its financial results showed yesterday.
The group made a profit of $2.2bn (£1.4bn) in the three-month period, compared to a loss of $33m in the same quarter of 2012.
Personnel costs dipped $121m, reflecting the nine per cent fall in headcount from 272,594 a year ago to 247,943 at the end of the third quarter this year.
Revenue from investment and brokerage services increased 7.7 per cent to $3bn, while trading incomes edged up to $1.27bn.
But other areas saw revenue fall, with card income down six per cent to $1.4bn and mortgage incomes plunging 71 per cent to $585m.
The biggest improvement came in bad loans – the bank set aside just $296m to cover the impairments in the third quarter of 2013, down from $1.77bn in the same period of 2012.
Chief executive Brian Moynihan said the bank should see its results improve further.
“The economy and business climate will improve even more quickly as conditions normalise, and we are well positioned to benefit from that,” he said.
Return on average tangible common shareholders’ equity improved from 0.74 per cent a year ago to 6.32 per cent this year.
But the bank’s tier one common capital ratio edged down from 11.41 per cent to 11.08 per cent.