Bank of America makes record $16.65bn settlement with US regulators over mortgage-backed securities
Bank of America is to pay out $16.65bn (£10bn) to settle an investigation into sales of mortgage-backed securities dating back to the financial crisis.
As agreed with the US Justice Department America's second-largest bank will pay a $9.65bn cash penalty to the US government and provide around $7bn of relief to consumers.
The figure is nearly as much as the bank’s profits between 2011 and 2013 which totalled $17bn, and Bank of America said it expected the settlement to reduce third-quarter earnings by about $5.3bn before taxes, or about 43 cents per share after taxes.
It’s expected to bring to a close Bank of America’s remaining liabilities from its purchase of mortgage lender Countrywide and Merrill Lynch.
Bank of America chief executive Brian Moynihan said: "We believe this settlement, which resolves significant remaining mortgage-related exposures, is in the best interests of our shareholders, and allows us to continue to focus on the future."
The pay out is the largest ever made to US regulators and brings Bank of America's total bill since the financial crisis to $54bn, more than any other financial institution.
Read more about how Bank of America's settlement compares to other payouts.