Bank of America Corp.'s third-quarter loss widened, though adjusted results topped analysts' views, as the banking giant wrote off $10.4 billion related to its credit-card unit and reported much improved credit quality.
Shares fell 1.1% to $12.21 premarket after a 3% rebound Monday. As of then, the stock had fallen 28% in the past year.
"Our results this quarter demonstrate continued traction with each customer group - consumers, businesses, and institutional investors," said President and Chief Executive Brian Moynihan. "We are adapting to the regulatory environment, credit quality continues to improve, and we are managing risk and building capital."
The bank had said in July that it expected to write down the value of its credit-card business by $7 billion to $10 billion in the third quarter because new banking rules would make it less profitable.
The nation's biggest bank by assets, Bank of America has recently seen its performance lag across nearly all of its business lines. In the third quarter, though, the company's home loans and insurance segment narrowed its loss on lower credit-loss provisions, while its global commercial-banking arm swung to a profit, also on lower loss provisions. Profit at the global banking and markets segment declined 35% as expenses increased.
Fitch Ratings in August said that although Bank of America still has a high level of nonperforming loans and exposure associated with mortgage buybacks, a decline in loan-loss provisions--which has been a big boon in recent quarters for the bank--could continue as loan quality improves.
Bank of America reported a loss of $7.3 billion, or 77 cents a share, compared with a year-earlier loss of $1 billion, or 26 cents a share. The latest quarter would have had a 27-cent profit absent the credit-card write-down. The year-earlier quarter included $2.6 billion of write-downs.
Revenue climbed 2.3% to $27 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of 16 cents on $27.2 billion in revenue.
Credit-loss provisions slumped to $5.4 billion from $11.71 billion a year earlier and $8.11 billion in the prior quarter, while the net charge-off rate was 3.07%, compared with 4.13% and 3.98%, respectively.