Bank of America Q3 profits drop

Banking giant Bank of America posted a drop in year-on-year profits despite witnessing better-than-expected fixed-income trading and improved interest income in Q3.

Bank of America reported third-quarter profits of $7.1bn, or $0.81 on a per share basis, down 8% year-on-year, as the firm booked a $378.0m credit loss provision - compared to a release of $1.1bn at the same time a year earlier.

Pre-tax income declined 7% to $8.3bn, while revenue, net of interest expense, jumped to $24.5bn - up 8% and beating expectations for a print of $23.57bn.

Average loan and lease balances were up $114.0bn, or 12%, to $1.0trn, led by strong commercial loan growth as well as higher credit card balances, while investment-banking fees fell 46% amid a decline in global dealmaking.

Chairman and chief executive Brian Moynihan said: "We continued to see strong organic client growth across our businesses, with increased client activity helping to drive revenue up by 8%. Our US consumer clients remained resilient with strong, although slower-growing, spending levels and still maintained elevated deposit amounts.

"Across the bank, we grew loans by 12% over the last year as we delivered the financial resources to support our clients. Our team adapted well to our new capital requirements and improved our CET1 ratio by 49 basis points to 11%, above our new regulatory minimums. I am proud of our teammates' efforts to deliver for our clients and shareholders."

As of 1300 BST, Bank of America shares were up 2.84% in pre-market trading at $32.60 each.

Reporting by Iain Gilbert at Sharecast.com