SURPRISE legal bills pushed Bank of America Merrill Lynch (Baml) to a $276m (£164.3m) loss in the first three months of the year, the lender said yesterday.
Revenues fell 2.7 per cent to $22.6bn, compared with the same period a year ago, while expenses increased 14 per cent to $22.2bn.
But the main blow came from litigation provisions – Baml set aside $6bn in the quarter, up from $2.2bn in the first three months of 2013.
Of that, $3.6bn was for mortgage-related costs.
By business line, one poor performer was fixed income operations, which joined the industry-wide rout.
Revenues in fixed income, currencies and commodities (FICC) dived 15 per cent, excluding a legal bill from the first quarter of 2013.
The sector is taking a beating from new regulations and from bond prices falling.
But some business lines did improve on the year.
Revenues from investment and brokerage services rose eight per cent to $3.3bn, while equity investment income jumped 39.2 per cent to $784m.
Baml’s fully phased in Basel III capital ratio increased from 9.5 per cent to 9.9 per cent. And it is trying to cut costs – the bank’s headcount fell 9.2 per cent to 238,560.
Baml’s shares fell 1.6 per cent over the day.