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Global banking, consumer banking profits rise while trading dips at BofA

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Global banking, consumer banking profits rise while trading dips at BofA

Bank of America Corp. on Oct. 13 posted a 15.0% year-over-year increase in third-quarter results.

Net income applicable to common shareholders climbed to $5.12 billion, or 48 cents per share, from net income of $4.45 billion, or 41 cents per share, in the third quarter of the prior year.

The S&P Capital IQ consensus estimate for normalized EPS in the third quarter was 46 cents.

Net income in the global banking segment was $1.76 billion, up from $1.55 billion in the 2016 third quarter. Also, net income in the consumer banking segment increased to $2.09 billion from $1.81 billion a year ago. The global wealth and investment management segment also saw a year-over-year increase in net income, to $769 million.

On the other hand, the global markets segment's net income decreased by $318 million from a year ago, to $756 million, due to lower revenue.

The company recorded a provision for credit losses of $834 million, compared to $726 million in the previous quarter and down from $850 million a year earlier.

Net charge-offs totaled $900 million, compared to net charge-offs of $908 million in the previous quarter and net charge-offs of $888 million in the prior-year quarter.

Total revenue, net of interest expense, was $21.84 billion in the 2017 third quarter, compared to $21.64 billion in the year-ago third quarter.

Nonperforming loans, leases and foreclosed properties were $6.87 billion for the quarter-ended Sept. 30, compared to $7.13 billion for the quarter-ended June 30, and $8.74 billion for the quarter-ended Sept. 30, 2016.

The company's reserve release for the third quarter was $66 million, down from $182 million in the previous quarter, and compared to $38 million in the year-ago quarter. The recent quarter's net reserve release was driven by continued improvements in consumer real estate and energy exposures, partially offset by seasoning in the U.S. credit card portfolio.

The company's efficiency ratio, on a fully taxable-equivalent basis, improved to 51%, from 52% in the previous quarter, and from 55% in the same quarter last year. Headcount was down from the previous quarter by 1,065 to 209,839.