Bank of America posted third-quarter profit of $4.51 billion as expenses declined.
Net income was 37 cents a share, compared with a loss of $232 million, or 4 cents, a year earlier, the Charlotte, N.C., bank said Wednesday. The average estimate of 22 analysts surveyed by Bloomberg was for adjusted earnings of 33 cents a share.
Chairman and Chief Executive Officer Brian T. Moynihan, 56, has said he would trim expenses as low interest rates and volatile markets stymie revenue growth.
He’s been helped by waning legal expenses tied to his predecessor’s acquisitions of Countrywide Financial and Merrill Lynch, which have contributed to more than $70 billion in postcrisis costs. Revenue fell 2.4% to $20.9 billion. Still, that exceeded some analysts estimates, including the $20.2 billion estimate of Citigroup analyst Keith Horowitz.
“They’ve done a good job of keeping expenses under control,” Joseph Morford, an RBC Capital Markets analyst, said in an interview before results were released. Regarding trading, “things didn’t necessarily finish strong for anyone in September,” he said.
For last year’s third quarter, Bank of America initially reported a surprise $168 million profit after $5.3 billion in charges for regulatory settlements. Three weeks later, the firm said foreign-exchange trading probes wiped out an additional $400 million, leaving the bank with the fifth quarterly loss of Moynihan’s tenure as CEO.
Last month, Moynihan survived a battle to remove him as chairman, fending off critics including the biggest U.S. pension funds. A resolution allowing Moynihan to retain the two top jobs passed with about 63% of the votes. Pension funds and proxy advisers had argued that more independent oversight was needed for Moynihan, who is nearing his sixth year as CEO, as the bank’s stock trails peers.
Wednesday’s results are the first for Chief Financial Officer Paul Donofrio, who took over for Bruce Thompson in August. Donofrio was promoted in a broad shakeup that included making Terry Laughlin head of the bank’s wealth management division as David Darnell retires and naming human resources head Andrea Smith the firm’s chief administrative officer. Bank of America is also looking for a replacement for General Counsel Gary Lynch, who was named vice chairman in July.
After saying that third-quarter trading revenue was headed for a drop of about 5%, Moynihan cut about 200 trading and investment banking jobs at the end of the quarter.
JPMorgan Chase posted third-quarter earnings Tuesday that missed analysts’ estimates as a slump in trading and mortgage banking drove revenue lower.
Wells Fargo is scheduled to release results later Wednesday, while Citigroup Inc. and Goldman Sachs Group Inc. are slated to report on Thursday. Morgan Stanley issues results on Oct. 19.