However, $1.7bn of the profit figure was due to an accounting gain that has also affected the results of other US banks reporting this quarter. And $4.5bn in earnings was due to a rise in the value of its structured liabilities.
And $3.6bn of its earnings came from a one-off sale of its stake in China Construction Bank, which it offloaded quickly over the summer in a bid to placate panicking investors over its capital levels.
“Our focus this quarter was on strengthening the balance sheet by selling non-core assets and building capital,” said chief financial officer Bruce Thompson, reporting a core tier one capital ratio of 8.65 per cent. The bank also cut its balance sheet by $42bn over the quarter.
However, BoA’s investment banking business, which includes Merrill Lynch, reported a sharp drop-off in revenues, in line with the performance of many rivals.
Revenues fell by over a quarter to $5.22bn and pre-tax profits fell from $2.9bn to $727m. The bank blamed the figures on the fact that “risk aversion has [slowed] customer activity”. The investment bank results also included $1.7bn of the pre-tax accounting gain reflected in the group’s results.