Bank of America has returned to the black after the US lender said that it had made a profit of more than $4 billion in the third quarter.
Profits were down by about $800 million for the three months to the end of September against the previous quarter at $4.5 billion, but were an improvement on the same period last year when the bank made a $232 million loss.
The contrast in Bank of America’s fortunes was explained by the absence of the multibillion-dollar mortgage settlement costs borne last year, which meant that despite a drop in revenues, net income rose.
Brian Moynihan, chief executive of Bank of America, described the results as solid. “The key drivers of our business — deposit taking and lending to our consumer and corporate clients — moved in the right direction this quarter and our trading results on behalf of our clients remained fairly stable in challenging capital market conditions,” he said.
Through its Merrill Lynch division, Bank of America is one of the biggest players on Wall Street, and the group said the advisory fees it generated at $391 million for the quarter were the second best since its takeover of the broking business seven years ago.
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However, investment banking fees came in at $1.3 billion for the three months, a drop of $200 million compared with the third quarter of 2014.
The bank’s results followed a forecast-beating performance from JPMorgan Chase on Tuesday. JP Morgan said that it had generated net income of $6.8 billion for the third quarter, up from $5.6 billion a year earlier.
The profits rise came despite a 22.6 per cent fall in revenues from fixed income, currencies and commodities, the larger part of the bank’s trading operations, which fell to $2.93 billion.
Jamie Dimon, chief executive of JP Morgan, said the lender had put in a “decent” performance considering the trading backdrop. “We saw the impact of a challenging global environment and continued low interest rates reflected in the wholesale business’ results, while the consumer businesses benefited from favourable trends and credit quality,” Mr Dimon said.
- The San Francisco-based Wells Fargo reported profits of $5.8 billion for the most recent quarter, a rise of about $100 million year on year, with total loans rising by nearly $15 billion over the three months to more than $900 billion. The bank’s performance was boosted by its acquisition of a $30 billion loan portfolio from General Electric’s banking division. Deposits managed by Wells Fargo hit $1.2 trillion.
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John Stumpf, the chairman and chief executive, said: “Wells Fargo’s third-quarter results reflected the ability of our diversified business model to generate consistent financial performance in an uneven economic environment.”