Bank of America swings to third-quarter profit, beats expectations

Bank of America rose in pre-market trading after saying it swung to a third-quarter profit.

The bank posted a profit of $4.5bn, or 37 cents a share, beating expectations and significantly better than the $232m or 4 cents a share loss in the same period last year, when it was hit by a $16.65bn mortgage-securities settlement with the Justice Department.

Analysts had expected the bank to report earnings of 33 cents per share.

Revenue, however, slipped to $20.68bn from $21.21 billion in 2014.

Chief executive officer Brian Moynihan said: “We saw solid results this quarter by continuing to execute our long-term strategy.

“The key drivers of our business -- deposit taking and lending to both our consumer and corporate clients -- moved in the right direction this quarter and our trading results on behalf of clients remained fairly stable in challenging capital markets conditions. Our balanced approach to serving customers and clients is on track as the economy continues to move forward.”

Bank of America said costs fell 31% from last year to $13.8bn, as legal expenses dropped to $231m from $6bn.